In part three of this series, we will discuss the differences between residual income and passive income. These two terms are often used interchangeably, but in reality, they are not the same thing. There are some similarities, but there are also some big differences between residual income and passive income.
Before I move onto the part of the Residual Income Series.
I highly suggest you stop right here and read my previous articles regarding residual income.
Part 1: What’s exactly is Residual Income?
What is Passive Income?
First, let’s take a look at what passive income is. Passive income basically includes any money that you make without doing any work. Often times this money comes from investments of time or money that you have already made. With passive income, the person does not have to be directly involved with the money they are making. For example, if you buy a rental house you will get passive income from the rent or if you have invested in stock you will get passive income when the stock goes up.
What is Residual Income?
Residual income includes payments that you will receive after a sale. Usually, these payments are agreed upon in advance and will continue long after the sale. A good example of this is royalties that someone gets for a movie or book. They only write the movie or book once, but it can continue to be sold and resold again and again, which allows you to continue to make money from your work. Residual income is common in MLM network marketing, as you can make money from sales you have already made or from people you have already recruited. Residual income can eventually turn into passive income over time, as you can eventually earn money without doing extra work.
Methods for Earning Residual Income
Now that you know the differences between passive and residual income, it is time to learn about some of the most common methods people use to earn residual income:
- Selling products online: This is one of the most common ways to earn residual income. It usually involves a fee that has to be renewed each month or week, which will allow you to continue to make money after the initial sale.
- MLM Network Marketing: With MLM network marketing you will recruit representatives to go out and find new customers. You will get paid a percentage for every sale that they make, which allows you to make residual income even after the recruitment is finished.
- Affiliate Programs: Affiliate programs often fall in between passive and residual income. Although much of the groundwork has already by lain by the parent company, you might have to do some work to take advantage of it.
If you can get to the point where you are earning either passive or residual income (or both) then you know things are going right.
Making residual income with MLM marketing will take some time, but it is definitely possible. In part four of this series, we will get into more detail about how to make residual money with MLM network marketing. If you want to know more about to earn a residual income, click here to learn more.