What Is Residual Income?

Residual Income

Residual Income is the type of income that you continue receiving money after you’ve done a job well once, for example, singers and authors live from residual commissions from the worked they’ve done in the past. 

In essence, this form of income is little known to the masses. I think this might be the biggest reason why  1% of the population owns 99% of the wealth.

Not to long ago, this way of generating income was only available for kings, presidents, artists, and high level military personnel to name a few.

As you will learn in this informative page, residual income contrast to regular income (Linear Income) is not limited by time.

If you are looking to learn more in depth about residual income and how you can leverage this form of income, then you are in the right page!

I’m here to help, so if you get any question send me a message on the contact page me and I will be getting in touch.

Now, let’s continue learning how to harness the power of residual income to empower your dreams and financial future…

What is LINEAR INCOME? – Also known as ACTIVE INCOME

Linear Income also known as active income, regular income or earned income is the direct result of our efforts. It is when you work for hours and receive a payment for those hours of work. A good example of linear income are employees or self-service providers such as lawyers and doctors.

For example, when you work for yourself or somebody else you are certainly exchanging time for money. One of the major downside of linear income is that if  you get sick and can’t go to work you won’t generate any income. In most cases, the average person do not have enough income to live on for more than couple of months.


As Robert Kiyosaki explains in his cash flow quadrants, when you are an employee or self employed, you are working on the left hand side of the cash-flow quadrant where you exchange your time for money

Why Is So Important To Create Residual Income?

In the first place, this is a great question! In a sentence, my main reason of why earning residual income is so important? Is because I care about my family and their well-being. By creating residual income streams, I feel confident and secure that my family will have a healthy financial future and if something happens I know they will be taken care of.

Now, more on the business side of things I love residual income because it gives you 2 things that no other income gives and these are TIME FREEDOM and FINANCIAL FREEDOM. By generating passive residual income, you get to choose what you want to do in life, with who you want to do it, when you want to do it and where you want to to it.

Moving forward, how would you feel knowing that your mortgage, student loan, insurance, etc.., etc… are taken care of every single month for the rest of your life? Wouldn’t that be a great feeling? Right? You bet!

As a matter of fact, we all have residual bills so why not generating residual income as well?

6 Ways How To Earn Residual Income?

Now, you might be asking yourself… “Everything sounds good about generating residual income, but how in the world do I create it?”

I’m sure there are several ways, but I will only cover 5 of  the most popular ones:

  1. Create product that solves a certain problem or pain in a specific market or industry
    • Create a product or solution to prevent depression in young adults and sell it through chain stores or your website. If the product is a good fit for the market, you might have just created residual income for the rest of your life or even better, for generations to come.
  2. Real State – buy rentals properties and rent them for a profit
    • If you got the capital and want to get into the real state business, this is a fairly simple ways of creating recurrent income for years to come.
  3. Create and info product about a topic you might be an expert on
    • There are many info product market places on the internet. You can use these site to create a digital book about solving a problems that thousand of others people have. And you can start selling your product after creating a vendor account. 2 of the most popular info product market places are Jvzoo.com and Clickbank.com. These places have thousands of affiliates that will be happy to promote your eBook for a commission percentage of the sale.
  4. Buy a franchise
    • If spending 100’s of thousands is not a problem, you can buy a franchise which is a tested system that will generate you residual income. One of the major downside about this option is that it requires a large amount of capital upfront. Unfortunately, the average person does not posses 100,000 – 2 millions to buy a franchise.
  5. Network Marketing
    • Thankfully, we live in the time we live! Network Marketing currently has the potential of any of the business models above and with much less of the hassle that requires operating a traditional business.
    • Additionally, most network marketing companies are already establish in more than 5 countries which is amazing because you can leverage their systems, products, services, and infrastructure and create residual income by building a network of distribution around the world. One of the most the most attractive benefits of multi-levels companies is that you can start your business with $2000 – $500 dollars and operate your business worldwide which was just impossible just couple years back!
  6. Financial Investments 
    • Mutual Funds
    • Bonds
    • Stocks
    • These type of investments can also generate you compound income and passive residual income


What Do Rich People Have To Say About Residual Income?

Have you ever heard the phrase that “the rich are richer and the poor are poorer” ? This phrase is often used to explain the injustices when it comes to money and the financial system.

We can all agree that “this saying” is not entirely fair. But, the reason why this happens is because the rich focus on a completely different way of making money.

By the same token, there are thousands of stories about poor people who have accumulated great wealth though passive recurring income and the best thing is that this option is available to all of us.

In fact, people like Warren Buffets, Bill Gates, Richard Brason and Oprah Winfrey, among others, were not born in wealth.

However, they have accumulated great personal fortunes because they understood and used the power of leverage through residual income.

Likewise, they all build networks to generate wealth by leveraging passive income. If you look closely into their brands and businesses, you will notice that their main focus is on optimizing and growing the distribution of their products and services.

Design Your Dream Life Through Passive Income TEDx Talk by Alex Szepietowski

3 Companies that have massively leveraged The POWER of RESIDUAL INCOME

  1. Wal-Mart – One of the biggest chain stores brand in USA – Built a network of  stores around the world.
  2. MCDonald’s – The biggest fast food franchise chain around the world – Built a network of restaurant worldwide.
  3. UBER – The largest taxi company in USA – Have an army of drivers driving for them, again in other words they have a network of drivers all around USA and now even around the world and they don’t even own a taxi … amazing the power of networks, huh?

In short, my best recommendation for anyone that is interest in generating residual income is to look for a solid company with  high quality products and services and create a distribution through networks…

I’m sure you understood that networks is what creates residual income also know as passive income or recurring income!


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Gabriel Ramos
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