What are residual income?

[King bell]

A residual income is an income that occurs after you've stopped providing a service. It's a source of reliable, steady money that's often overlooked by people who feel like they need to work as much as possible in order to make good money. But the truth is, anything you do will generate residual income if it can be monetized properly. The most common sources of residual income are real estate investments and businesses with recurring revenues like memberships or a franchise system.

What's the difference between a residual and a passive income?
The two terms are often used interchangeably, but there are subtle differences. A residual income is an income that occurs after you've stopped providing a service. That may sound confusing at first, but teachers, musicians and other entertainers who rely on their work for a living often have residual incomes that come in after the end of the year. So does that mean you're still working? No, it just means that much of your time is spent doing administrative tasks rather than providing services for clients.

Most people assume residual income doesn't matter because they don't earn it every month.

 

[Mika]

A lot of people confuse passive income with residual income. Passive income is the income you generate without doing significant ongoing work. Let’s say you invested in stock market, and you receive dividends every 4 months without any work, or you worked hard to create a business and the business is generating income even when you don’t do significant work. Activities like blogging and vlogging are also passive income.

Residual income is the income that continues to build even when the work has been completed. If you retired from a job and receive a pension, that’s residual income. Receiving royalties from your books, arts, music are also residual income. Sounds similar to passive income right? Just like passive income, you don’t have to work for residual income it will continue to build income. Residual income is also the money you have left after paying your bills. In other words, your net income is your residual income.