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Creating Residual Income Can Make You Rich
Whatever you do, do not discount residual income to make you rich. While you can make money in other ways and you should, building residual income as part of your strategy to become or stay rich is vital to your pocketbook.
Let’s start out by talking about people who are in sales who work for a commission:
With most sales, you sell a product and you get paid. Great! You sell a lot of products, you get paid more. Here’s the catch. Until you sell another product, you don’t get paid. You are out of a job basically until your next sale. A good model if you keep making a lot of sales. A dry bones model if you run into a dry period of no sales. No sales = starving! Not where anybody wants to be. Residual income avoids these dry spots.
Let’s talk about trading time for money either hourly or salary. In other words a Job. The majority of the population opts for this type of model of making money. You agree to work x amount of hours for x amount of pay. You get so much vacation and sick time usually and by using these vacation or sicks days you still get paid even when you are not working. Great! That is great until something happens where you can no longer trade your hours for money. This is no joke! It happens to the best income providers. I have a friend who has a nice home, nice cars, nice income of $100,000 a year. Everything was nice until he had a stroke that disabled him from being able to perform his job any longer. Of course, he used all his vacation time, sick time, and disability benefits before the well went dry. He also had some money saved up which he lived on comfortably for a few years…until that dried up too. Now he’s dependent on the State to take care of him and his wife’s part-time income. Not a good place to be at all, and could happen to any one of us at any time! (God forbid, but yes, a possibility). Another big drawback to this model of making money is once you die, so does your income. Granted, you won’t need any money in the afterlife, but what about your family you are leaving behind for the time being? Residual income doesn’t have to stop, even after sickness or death!
So, now that we covered the dark side of life, let’s look at the bright side. Residual income!
First, what is residual income? First of all, what it’s not. It’s not passive income. Passive income is the idea that you kick back and don’t have to do anything at all for the income that continues to come in. Passive income is a fantasy. You must keep a look out at whatever income you have, even if it’s just certain times.
Now, what is residual income? Residual income is when you continue to get paid after the work is done. This includes royalties from books, movies, or songs and also income that comes from real estate or business investments where you don’t actually have to be present to earn it.
Bill Gates would be a good example of someone that has residual income. Not seeing yourself starting the next Microsoft? Don’t worry, there is hope.
Idea’s for Residual Income you can build for yourself:
The Network Marketing model is a possibility of building residual income for you and pass it on to your family. (Be sure before joining an NWM company they have the principle of passing on your business on to your spouse before joining). I’d suggest one that has been in business for more than 2o years and is still growing rapidly. * Young Living Essential oils are such a company. 21 years in business shows their stability and just recently reached the 1 Billion mark, which means the company is growing and not stagnant.
Write a book and promote it: Granted during the promotion stage you are still “working”, but once it catches fire, enjoy your residual income, possibly for life!
Make a movie. Nowadays you don’t need to be a big movie studio to make your own movie. If it catches on (such as The Secret by Rhonda Byrne) then get ready for some good residual income.
Make a song or songs. If you are a great singer or musician you could hit it big by getting an Album to sign you. Most of us though sadly enough are not that talented. But if you are, go for your dreams and be sure in your contract is royalties that will be paid to you.
Real Estate Rentals: In my opinion, there’s a right way and a wrong way to own Real Estate Rentals and that is not to be an active manager. In other words, you build into your rent, the expenses of maintenance done by a management company. Let them handle repairs, collecting the rent, etc for a percentage of the profits. This way, you can create a large rental empire of your own. A bit hard to manage past 20 rentals on your own, so you might as well start it out the right way and build your empire for lasting residual income. Just keep an eye on what’s going on and make your the company or companies you have handling your properties are doing their job. If not, fire them and get someone that will.
Real Estate through REIT’s: You can invest in a publicly traded REIT, which is listed on a major stock exchange, by purchasing shares through a broker or there are some private REIT’s you can get involved with also. I myself am not a fan of REIT’s because there is no hard asset that you can keep as your own, but I have known people that have done well with REIT’s.
Stocks through the Company you work for: While I downplay the model of having a job, there is one advantage if you work for a large corporation that offers a Stock Purchase Program and you feel the company you work for will be a good investment, this would an excellent way to buy stock of a company usually at a good discount for 5-20% off the average going market rate. So the value of the stock would have to go down that much before you even lost any money. Plus if that stock pays a dividend, even better!
Stocks and Bonds: During certain cycles of the economy either Stocks or Bonds could create a residual income either by earnings being paid out, and or dividends. I’m more of a fan of dividends than growth, as growth can be fickle, but if the Company has a long-standing of paying dividends for decades, then that would be a better investment in my opinion to create a steady residual income. Of course, growth and dividends are optimal.
Inventions that you sell that include in the contract royalties: If you have a patented idea that you want to sell, you could sell it outright, or even better, sell it with the contract of royalties. You could lease it out with noninclusive rights to many individuals and or companies with a royalty stipulation. (See your Attorney for details).
(1)Fixed Indexed Annuity (FIA) through a ROTH IRA: An upside with no downside. You make money when the market is up and when it’s down, you lose no money at all. It offers the potential for higher annual returns than other safe money solutions such as CDs or bonds. It provides a 100% guarantee of your principal- you can’t lose money. Your deposits remain in your control and you aren’t giving up access to your cash. The growth is tax-deferred and compounds annually. It provides income insurance, or a guaranteed income for life when you select an optional income rider. If it’s done through a ROTH IRA there is no taxes when you withdraw your money at 59 1/2 and no taxes on the income either with done through a ROTH IRA.
There are thousands of annuity products with a wide range of income payouts. Go to www.LifetimeIncome.com for more information.
These are just some ideas to get you started down the residual income lifestyle.
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May your days be filled with good health, good friends, good food, and most of all; much love,
Dexter D Black
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(1) Tony Robbins Money Master The Game 7 Simple Steps To Financial Freedom book.