Linear Income-

This is the kind of income that many people earn today with their jobs. You work 10 hours a day, you get paid for 10 hours. You work half a day, you get paid for 5 hours. You don’t work, you don’t get paid. When a person stops working, their income stops too.

Residual Income-

This is an income that keeps coming in month after month for work that you did in the past. Even if you stop working, the money will still come in.

Today, I would like to show you a few examples of how people are earning residual income.

1) Residual Royalties – This term is used for the residual income that an artist or an author receives. An authors will write a book and then make a deal with the publisher to give him or her a percentage of the book’s sale. Every time a book is sold, the author and publisher will each get a certain percentage of that sale.

Same thing goes with an artist. They will make a record and anytime a CD is sold, the artist and the recording company will get it too.

2) Residual Interest – When you lend money to other people, you would surely charge them interest. Once your lending debt is paid off from the lenders, the extra income that you will get in going to be icing on the cake.

3) Residual Commission – This type of residual income is being used in network marketing.

This is how it works:

Let’s say that you change your buying habits and buy your monthly supplements from the company each month for $100. Now, you tell 5 other people to do the same and join the company under you. So the first month, you and the other 5 people each produce $100 which equals to $600.

Let’s say that month 2, your 5 people each get 5 people. So then you would have 25 people plus you and the person that you sponsored yourself. That would be 27 people each producing $100 each. That would be $2,700. If the company would pay YOU 10% of that, you income would be $270.

That 2nd month’s income will not get you too far and won’t buy you a nice house with nice cars in it, but let’s keep going and let me show you the power of leverage.

Let’s say that after 1 year, your group goes from 27 people to 300 people. If each one produced $100, that would be $30,000 in group volume. 10% of $30,000 is $3000 a month that you will get every month in residual income. Do you see where I am getting to?

Residual income is great but you do need to be careful if you are looking to make that kind of income. It is very true that there are scams so you do need to do some research before you jump in with both feet.

Cynthia ~Social Cowgirl
www.SocialCowgirl.com