by John Louie Ramos

Created on: April 26, 2010   Last Updated: October 26, 2010

The main idea behind the term residual income is earning money even after the work has been done. It is more like reaping the dividends of yesterday's hard work. The term residual income also known by names such as passive or recurring income, is income that is continuously generated even after the effort has been expended.

As compared to regular income or the "one shot" income which employees receive, residual income tends to be more lucrative in the long run.

Having a residual income is very beneficial especially during these times of financial crisis where regular jobs aren't stable. It's quite similar to investment securities wherein you receive regular dividends.

One of the most popular and easiest ways of earning residual income is by writing articles for ad-revenue sharing websites like Helium, Bukisa and Associated Content.

Hence, residual income can also be generated in ways such as:

Multi level marketing/networking - multi level marketing is actually a marketing strategy of a company. However, from the point of view of members MLM is a business opportunity. The matrix model allows members to share with the company's earnings. You'll just need to refer the program to several people and let them do the work for you.

Savings and time deposits - although not that lucrative, maintaining a savings/time deposit account is proven to be one of the most effective, safe and sure ways to generate a stream of residual income. Savings and time deposit accounts have fixed monthly interest rates.

Investment in preference shares - unlike ordinary shares wherein dividends depend on the performance of the company, preference shares carry certain advantages in terms of dividend distribution. Preference shares have a fixed dividend rate and are paid irrespective of the financial condition of the company.

Residual income is a good source of extra money but if you're actually thinking that residual income would be your golden ticket to vast riches. I beg to disagree, you are mistaken.

Residual income isn't the sole key to being wealthy but it can help you a lot in achieving your dreams of sailing in your private yacht on your way to your private island. Having a stream of residual income allows you to devote your time on other productive things.

I do agree, residual income is the way to wealth, if only you wouldn't rely on it heavily.

As a conclusion residual income together with your regular income plus innovative ideas, hard work and critical business thinking will lead you to wealth.

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