What Is Residual Income?
If you are applying for a loan, residual income is the money left over after you've paid your mortgage and monthly expenses. In a business context, a more common definition is income received on a recurring basis for work done one time. For example, monthly rental income after buying a residential property, or commissions paid on recurring customer purchases. Residual income continues to come in even after your work is done. Think of royalties earned from writing a book or producing a music CD.
Residual income in business is based on sales of your product or service month after month (commissions). The more satisfied customers you have, the more residual income you earn. It's different from a regular wage based on the number of hours you work.
Residual Income Is Different From Earned Income
If you have a job and earn a salary, you stop receiving income when you stop working. You can earn more money by assuming increased responsibilities in a higher paying job or working longer hours. In both cases your income is determined by your company or boss.
Initially you need to work harder and longer hours to earn residual income, and your results could take 12-24 months (or longer) to materialize. Think of struggling actors, musicians, artists and home business owners. Once you get that coveted role, or lucky break, get discovered or finally break through in your business, the residual income rewards continue to come in even after you complete a project or close the sale. Your potential income is based on your skill, consistency, determination and hard work.
In home business, your job is to identify your ideal customer and give them what they want. Your residual income increases as your paid customer base increases. By investing time in building relationships and educating your prospects BEFORE they buy, you can attract lifetime customers.
Ways To Earn Residual Income
Writing books and information products, rental income, network marketing sales, Internet advertising and affiliate marketing are some ways to earn residual income. Creating profitable online marketing takes commitment, money and time. However, once your income-generating websites are established, you can generate plenty of residual income. Rental property can also generate residual income. Interest and dividends earned on savings and investment portfolios are another source of residual income.
Residual Money Builds Over Time
There is a LOT of work involved in earning residual income. Don't be fooled, there is no such thing as easy money. Whether it's writing a book, buying rental property, or starting a home business, your work never stops. You must constantly maintain, improve and build upon your success. Because you are the boss AND the employee, working from home requires even more discipline than working for wages.
For a successful home business, find a product or service your customers value and will pay for month after month, year after year. Network marketers know that customer attrition can adversely affect their residual income. For income stability, match the right product with the right customer for long-term business growth. Build strong relationships, a strong brand (You) and customer loyalty will reward you with consistent residual income.
Increase Residual Income With Teamwork
There is good news with the network marketing residual income model. It's a team business. Even though your success ultimately depends on you, you can increase residual income by finding like-minded people to join your team. Why? Because you will also earn residual income from THEIR efforts. As your team's sales volume increases, your residual income will also increase. In any home business endeavor, be sure to understand how you are compensated. Take your personal style and preferences into account when choosing a team and product to promote.
For reliable, long term, consistent residual income in your home business, learn good business practices. Develop strong sales and marketing skills. Supplement personal efforts by using effective online marketing systems to generate leads, follow up with potential customers and close sales.
Cindy McMillan, Founder
P.S. If you feel like you're working way too hard to build a team in network marketing and need some answers, this book is for you: Download Your Free Report Now
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