When my husband and I are on a long drive we spend our time talking about our 3-5 year plan. What we want for our future. We realized on our drive last weekend that anything we ever do moving forward will only be something that creates residual income. Something where the income continues to grow even after our initial effort has been expended. The work we do now, continues to increase our income without us having to do more work.
It just makes sense, doesn’t it? It is how we can retire early. Send our kids to college. How I can be outside on this beautiful sunny Wednesday instead of in an office, yet still be generating an income beyond what I did in my full-time marketing career.
So what is Residual Income and how does it work?
Residual income (also called passive, or recurring income) is income that continues to be generated after the initial effort has been expended. Compare this to what most people do to earn money: linear income, which is a one time payment payment in the form of a fee, wage, commission or salary.
Linear income is directly proportional to the number of hours invested in it, usually 40 hours a week. You always get the same paycheck. Nice right?
But even nicer is residual income. Residual income is income that once things are set in motion, you continue making money from your initial efforts and hours put in without having to put in more to earn more.
This allows me what I cherish most… time freedom!
There are many ways to earn residual income. I chose the direct sales/network marketing avenue with Rodan + Fields. But here are a few others that work for people and that my husband and I are looking into adding into that 3-5 year plan I was talking about.
1) Writing a book, designing an app, or creating a program then giving it to a company that agrees to pay you a percentage of each copy of your work sold in the future.
2) Actors and recording artists draw residual income from each of the movies, TV shows, or commercials, each time they run.
3) Purchase real estate that earns you recurring income through lease or rental payments.
These ways of earning residual income generally aren’t that easy to implement. Especially if you want to jump in right away. May cost a large amount of money up front or require a natural talent or years of education. So, here are some additional residual income ideas that almost anyone can start at anytime.
4) Start a savings and investment program that pays you interest or dividends.
5) Join a legitimate direct sales or network marketing company where you can grow a team. Also make sure this company has consumable products that customers continue to use and purchase.
I loved my salaried career in marketing. It was engaging, exciting, and something I loved. Believe me, I never thought a career in direct sales would be what I would end up doing. But now, we know we can never go back to a standard hours worked, same paycheck received for the rest of our lives. All our future financial plans now revolve around adding residual income.
I get to spend my day with my family and kids. I work when I want around my schedule. I don’t have to worry about being laid off or downsized. I get to reinvest my residual income into more residual income opportunities to keep my income growing in a variety of avenues.
We’d love to share what we have learned on this journey and how its changed our financial outlook. Ask us. Is it different than the traditional way of working and earning, yes. But it is so worth it!