Earning money long after you actually put out effort is a great way to multiply your money. If you are earning residual income (also known as passive or recurring income), you have a source of wealth that isn’t dependant on your current work situation. If you’re making a steady income, the residual income will be additional wealth support.
What is Residual Income?
First, understand that linear income is what most individuals earn. A salary, wage, or commission are all linear income or income that is paid for a single service rendered. Residual income, on the other hand, continues to be generated after the initial effort is expended.
Some examples of residual income opportunities are:
- Author’s book rights
- Software program rights
- Income paid to an actor for movies or TV shows each time they run
- Rent paid to an owner of real estate properties
- Savings and investment program that pays interest or dividends
Financial security provided by residual income
Hopefully, you have a few months of expenses saved in an emergency fund. If you’re earning residual income, you have even more padding on top of your savings. It can create flexibility during times that you may be without a job or working to start a new business venture.
Financial freedom provided by residual income
Some people get excited by the idea of working at a job they are familiar and comfortable with for most of their life. They will earn a steady income and gain expertise in a particular area. However, other people find excitement in learning new crafts and exploring different industries throughout their life.
For people who fall into the latter category, residual income is one way to gain the freedom to try many things while having a secure income. If they create a piece of work within each industry that earns them residual income, they are given the freedom to continue changing industries without risking losing personal wealth.
Learn How to Earn Residual Income
Schedule a free 45-minute consultation with one of our advisors to get started becoming your own banker. Our associates will help you assess your current financial position and set realistic goals for residual income ideas. Make a plan to build your personal wealth and gain financial freedom as efficiently as possible with Alpha Omega Wealth.