Residual Income and Linear Income

How to Earn Money Through These Ways

Residual income (also called passive, or recurring income) is income that continues to be generated after the initial effort has been expended. Compare this to what most of us focus on earning: linear income, which is one-shot compensation or payment in the form of a fee, wage, commission or salary.

Linear income is directly proportional to the number of hours expended (40 hrs. of pay for 40 hrs. of work). One of the great advantages of residual income is that once things are set in motion, you continue making money from your initial efforts, while gaining time to devote to other things... such as generating more streams of residual income!

There are a variety of ways residual income can be earned.

Following are some examples.

1) Transfer the rights to a book you wrote, a software program you created, a gadget you invented, or a song you recorded, to a company that agrees to pay you a percentage of each copy of your work sold in the future.

2) Become an actor and draw residual income from each of your movies, TV shows, or commercials, each time they run.

3) Let an oil company drill a well on your property in exchange for a percentage of the revenue.

4) Purchase an office building or other real estate that earns you recurring income through lease or rental payments.

The above ways of earning residual income generally aren't that easy to implement. Following are some that are more attainable for the average person:

5) Maintain a savings and investment program that pays you residual income in the form of interest or dividends.

6) Market your own products and/or services that lend themselves to repeat sales.

I'm referring to products or services that are regularly used or consumed, and that must be purchased over and over again.

A product or service that you create only once, but sell over and over again, could also be categorized as a form of residual income (although continual effort may be required in marketing it).

Don't have your own product or service that lends itself to repeat sales? Consider the next two options for earning residual income...

7) Join affiliate/associate programs that offer products or services that lend themselves to repeat sales.

For example, Internet marketers regularly use services such as web hosting, autoresponders, etc. Some affiliate programs that offer such services pay residual commissions to resellers for as long as the original customers they've referred remain paying customers.

8) Join affiliate/associate programs that pay commissions on two levels.

Certain affiliate programs can also generate residual income in another way: by paying affiliates a percentage of the commissions earned by those who sign up under them.

For the sake of this article, I'm not referring to MLM (network marketing) programs with many levels. I'm referring to affiliate programs with no more than two levels.

Since many affiliate marketers don't actively promote their programs, don't sit back and rely on income from second-level commissions, but view it as icing on the cake. You'll have better success with a program if you actively market it yourself.

Some of the most ideal affiliate programs combine the best of both worlds: Products or services that lend themselves to repeat sales, plus residual commissions based on the earnings of those who sign up as resellers under you.

I've done a lot of research on affiliate programs. For a list of the best e-commerce affiliate programs my research has revealed, see: http://AffiliateProfitInfo.com/programs/best.htm

Last Words

The best types of residual income are usually those that you have exclusive rights to or otherwise control. They may be harder and more time-consuming to develop or acquire, but the rewards are usually greater, and the income more stable.

I'm not against earning good, honest, "one-shot" linear income, but given a choice, which would YOU rather do: get paid only once for work you've done through linear income, or get paid repeatedly - perhaps for years or even the rest of your life - for work you've performed only once, through residual income?

About the Author

Check out Marty's directory of only *proven* money-making affiliate programs at: http://AffiliateProfitInfo.com/guide/ His highly-rated book, Internet Marketing Goldmine, reveals powerful Internet success strategies and is available at: http://ProfitInfo.com/

Written by: Marty Foley