What is Residual Income and How to Earn It

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residual incomeThe ideal income type is the residual income. Residual income, by definition, is a passive income that you will receive regularly, even if you put less effort on it or none at all. You have done the hard work of creating the system, now is payback time where you shall sit down and relax and still keep receiving recurrent income from the system.

This is what most businessmen, marketers, and entrepreneurs aspire for. But it is something that normally requires patience and hard work at first. It is rarely done overnight, and creating the system will take time. You should establish a credible reputation, as well, in order for people to keep on subscribing to your services, or to keep on buying more.

The opposite of residual income is active income, which is common among employees. They work 9 to 5 every day and they will keep on receiving income for as long as they work. The income amount is more or less fixed, or there is limit to their earning capacity. The moment they stop working, income will also stop.

Contrary to that, residual income has no limit, and you don’t have to work on a set time. If you are able to build a very successful system, income will keep flowing in even if you are no longer working or while you are out on a trip for a vacation with your loved ones and friends.

How to Earn Residual Income

Fortunately, there are companies today with compensation structures that allow you to earn passive income. You can also build your own system where the operation can be set on automated mode and income will keep flowing in with minimal supervision. Either way, here are a couple of opportunities where you can earn residual income.

Multilevel marketing

This is arguably the most popular method of earning passive income. In order to reach the residual income level, you have to recruit as many downlines as you can. Your direct downlines called tier 1 will work for you. Every time they make a sale, you will get a share of the commission. In some multilevel structures, you can even receive additional income from tier 2 to tier 3 downlines.

If you happen to recruit direct active downlines that are proficient in recruiting new members, you will become more successful. The success of your downlines is also your success. That is why it is important to provide outstanding support to your downlines because they can do all the legworks of marketing while you enjoy a share of their earnings even without exerting additional efforts of your part.

Affiliate programs with recurrent payments

Another way of earning residual income is by joining affiliate programs with recurrent payments. Not all affiliate programs offer passive income. Selling a product that requires a one-time purchase is active income. You will only earn as long as you get a sale, and as long as you keep on marketing your offers.

However, there are products that require monthly or yearly subscription. One good example is the affiliate programs of webhosting companies. Webhosting is not a one-shot deal. Rather, it is a subscription-based service. Website owners don’t buy a webhosting plan but they have to subscribe to it in order to continue enjoying the webhosting services.


The moment they stop paying for the subscription fee, their webhosting will also cease and they will lose all their efforts of building and promoting their websites. As an affiliate, you will enjoy commission every time a monthly or an annual payment is made via your affiliate link. So even if you are no longer promoting the product, earnings will continue for as long as the website owner maintains the webhosting plan. The more sales you get, the higher will be the amount of your passive income.

Aside from webhosting services, the affiliate programs of online courses, services, one-on-one coaching, and paid forums are also great ways to earn passive income. A good example is Wealthy Affiliate (WA). By joining the WA, you will enjoy one-on-one coaching by a couple of successful affiliates. You will have access to many affiliate tools and trainings, as well. The moment you stop your subscription, you will no longer be able to access to the program.

If you are an affiliate of such paid programs, you will earn passive income from the subscribers that joined through your affiliate link. Your earnings will continue for as long as the member is subscribed. The good thing about this is that the program itself will do the best it can to keep each member subscribed not just for the success of the program but for your success, as well.

Create Your Own Passive Income System

Aside from joining programs with residual income compensation structure, you can also build your own system wherein earnings are recurrent. You can create your own blog and start adding regular posts that provide value to the readers.

Sooner or later, you will have many followers that will subscribe to your RSS feeds. Some will bookmark your website for future reference. Your targeted web traffic will increase, as well.

Once your blog enjoys high monthly traffic, you can rent ads space in your blog. This will give you recurrent income as long as you are also able to maintain the high number of top-quality visitors to your site. Another option, in this case, is to place Google Adsense ads at strategic places. You will earn passive income from Adsense.

In the real world, having an apartment or a house rental is a form of earning residual income. Earnings will come while you do literally nothing. That is why residential properties are good investments because you earn sufficient amount of passive income on properties situated in strategic locations.

So if you are going to venture into business, it is best to create a structure where you can earn passive income instead of active income. Likewise, if you are planning to join an affiliate program, it is highly recommended to choose programs where you can earn residual income.