by Sharon Meyer

Created on: August 15, 2009

Have you heard the term residual income and find yourself not so sure what they are talking about ? According to the Business Dictionary, residual income has two definitions. The first is : net income that an investment can earn over the minimum rate of return.
The second is : royalty income that accrues to the owner of an intellectual property, such as art, books, lyrics ,music, patents, etc.

Sometimes residual income can be thought of as money repeatedly being made without any effort beyond your initial effort to set it up. It is also referred to as passive income. One thing that everybody who is involved in making residual incomes can agree on is that it is a great way to build wealth.

Creating multiple streams of residual income builds wealth on an even faster level. Some well known ways of earning a residual income is through owning rental properties or through sales commissions earned such as an insurance salesman who gets a commission every year that an insurance policy is renewed. Now if that insurance salesman also owns rental properties , writes a book on his experiences and earns commissions from his insurance sales then he has created multiple streams of residual income.

One way that a person can start to build residual income is to join a business that is based on multi-level marketing. With multi-level marketing you can earn residual income even after the initial sale has been made. When you join a multi-leveled marketing business you can do direct sales but you are also encouraged to recruit new members under you. Once your new recruits begin making sales then you will be earning commissions off of their sales. In order for this to properly work at gaining a residual income for you it is imperative that each of your recruits also recruit.

The best source of building a residual income is through affiliate programs. With affiliate programs you sign up over the Internet to sell other companies products, In affect, you become their partner. The best part is that you will not have to invest a single dime of your own money. They will give you a web site that you will then direct others to so they can buy the product. Others allow you to advertise their product on your own web site or through blogs and direct emails. The best way to find these programs is to do an Internet search using the term "affiliate marketing programs."

If you are good at writing then writing and selling informational e-books are a great way to earn residual income and your start up costs again are minimal. You will only need to write your e-book one time and then list it somewhere like Ebay or Craigslist to sell over and over again. Once you have written enough informational products you can try building your own web site to sell them.

Once you have learned the concept of building wealth through residual incomes you will discover more and more ways to build small businesses with each of them earning you money over and over again with very little effort on your part.

Learn more about this author, Sharon Meyer.
Click here to send this author comments or questions.