This is the kind of income that most people are familiar with. You work, you get paid. You work again, you get paid again. In other words, to renew your income, you must renew your work activities.
This applies to wage earners (often paid weekly), salary earners (usually paid monthly) and also to professionals (e.g. consultants, doctors, attorneys, accountants, architects), who get paid according to their stated payment terms for the professional work they do.
For all of these kinds of jobs or careers it’s a case of ‘no work, no pay‘. For professionals, this translates to ‘no clients or patients, no income‘.
It also means:
It is used to create ‘now’ money, which is useful in the short term, and for many people, it is their only source of income for most of their lives. But experience has shown that one’s regular work income often isn’t enough to enable one to live the quality of life desired. As they say, the money runs out before the month does. This can lead to overwork, needing to have a day job while moonlighting with a night job too.
The result is often heavy stress, non-fulfilment in life, and even serious ill-health.
This is the kind of income that, once it has been established, keeps coming in regularly even when you’re not actively engaged in generating it on a daily basis.
If you have millions to invest, you can usually start earning recurring income on your assets immediately. But, you first need to have the millions to invest. Most people don’t. If you don’t have the capital, it takes a little longer to build up an income-generating asset that will yield a growing recurring income that you can live or or than can boost your lifestyle significantly.
With a good residual income business plan, you can in fact start building your own income-generating asset from scratch, yet with no large capital investment or overhead expense needed for getting started. You can do it part-time too. And if you choose a good residual income ‘vehicle’, it can take very little time each day. But it does require determination and perseverance to stay working at it for the long haul.
A residual income business takes one toward personal and financial freedom, debt-free living, less stress, early retirement — in other words, an improved quality of life.