Residual Income vs Linear Income

February 23, 2015

Are you looking to find out the difference between Residual Income vs Linear Income?

Have you ever heard of the term residual income?

It’s an income that surprisingly is largely unknown in the world.

If you’re reading this and shaking your head wondering what exactly residual income is, you’re at the right place standing in the shoes that I was around four years ago.

It’s one of those concepts that should be taught by every teacher in every school, but oddly is not.

Maybe it has to do with schools prepping students to get a job working for someone else… After all, hard-working employees don’t need to know about financial freedom and ways to manifest it, otherwise, they wouldn’t be employees very long!

The concept of Residual Income somehow could throw off the line many people that have a hard time understanding this FACT and mistakenly chase false promises of quick or easy money.

That’s why there will always be crooks in the world pitching “get rich quick and easy”. Successful people ignore them. Naive or greedy people usually get burned.

Looking To Generate Multiple Streams Of Income?

Of course, you do… Right?

Every single person, whether if you have a job or you are self-employed and in any industry, wants to earn multiple streams of income to increase their financial portfolio.

So they can become financially free and be able to provide for their loved ones.

Ok, so what do you need to do to make it happen?

There are 3 things that most people struggle with.

It’s Not using the right vehicle/opportunity – no training & support system and not having the right mentorship/guidance.

If you don’t have any of these things, you are bound to struggle at first and are likely to go out of business upon stumbling on your first “obstacle”, this is where most people quit in this industry.

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Understanding Residual Income vs Linear Income

Without a major investment of time or money it takes most ‘ordinary’ people a year or two of part-time work to generate a decent income, and another year or two to really hit the big time.

But achieving success with 2 – 4 years of part-time effort beats all day the widely accepted plan we are taught at school of ‘slaving’ working for 30 – 40 years, 40hrs a week working for someone else to make them wealthy!

There are many reasons why you should consider Network Marketing as the career choice, starting from spare time, part-time or even full-time. However, before I begin stating all the reasons, I would like to briefly go through the difference between the 2 main types of income sources. Following this business model, it is possible to earn residual income.

What is Residual Income?

Imagine yourself being continuously rewarded over and over again for a one-time initial action?

For example, you do or accomplish something once, but you keep getting paid each month over and over again for the work you’ve done only once.

Great, huh?

While it is true that residual income brings some of the amazing long-term financial benefits, can significantly improve your current financial situation and is a wonderful stepping stone to your financial freedom.

Lets’ review and compare 2 types of income

1. Residual Income
2. Linear Income

RESIDUAL INCOME

(Also known and called “passive income”, “recurring income” or “leveraged income”) is a type of income that continues to be generated after the initial effort has been expended or in the other words this income continues to come to you long after the work you’ve done to produce it has ended.

One of the factors that make Residual Income so tempting and long-term benefit is that a true residual income is NOT directly proportional to the number of hours invested or a number of products/services sold. For example, you do the work once or twice, but you keep getting results over and over again.

One of the greatest advantages of residual Income is its continuous cash-flow effect. Once things are set in motion, not only:

* you continue making money and keep getting paid over and over again for your initial efforts, but also
* your (monthly) residual income can also steadily grow each month while you are investing the same amount of time and work.

From the earnings point of views, residual income is NOT directly proportional to the number of hours invested or a number of products/services sold. That’s its true benefit and residual income is so tempting.

Residual income earners are people who do the work once initially and the income will continue to flow in even after the work has been completed.

Professionals who fall into this category include Authors, Songwriters etc.

Network marketers can also enjoy the long-term residual income if they choose the right company that can withstand the test of time.

People who earn a residual income are better off as they will continue earning even if they have stopped working.

Network marketers who continually build their business are leveraging not only on the residual income but the power of multiplication as well.

LINEAR INCOME

(Also called “Transaction Income”, Fixed Income” or “Earned Income”) is basically a one-time compensation or payment in the form of a fee, wage, commission, salary or margin.

You do something once and you also get paid only once.

Basically, it is everything what residual income is not.

Today, more than 80% of people are relying to linear income when it comes to making their living.

As in Linear Income you make money only when you sell one or more products, or one or more hours of your service.

As soon as you stop selling products/services or as soon as you stop working the job for some reason, the flow of your income stops as well.

This is why this type of income is called “Linear Income” because it is directly proportional to the number of hours being invested or a number of products/services sold.

Linear Income earners are people who earn a steady, fixed regular pay every month. Most professionals fall into this category including engineers, teachers, accountants, doctors, technicians etc. You have to be physically present to do the work in order to earn the income. If you are out of job or do not work for the month, you will not have any income.

Appreciation of income comes in the form of promotion or increments at the end of the year. No work means no money. Linear income earners are trading their TIME for MONEY.

Residual Income vs. Linear Income = Long-Term Gain vs Short-Term Gain

For 80% of people, there is usually no better way but to choose “short-term gain” by settling with a safe and secure job with fixed monthly salary and living from paycheck to paycheck.

The problem is, however, today it is not only hard to get a decent job but it is probably even harder to keep it. If you stop working, you get fired and quit a job for some reason, your income quickly goes down as well.

On the other side, we have Residual Income, which it usually takes some time, work and efforts to grow but it is all worth it at the end.

The level of Residual Income usually skyrockets to the top almost with exponential growth. Plus, even if you stop working for some reason (starting a new business, vacation, travels…) after you have achieved some results, your Residual Income doesn’t and won’t go down. Contrary, it keeps paying you over and over again.

The benefits of the “residual income” usually happen when your business is a few years old and you’ve built a substantial organization, each person contributing a little percentage to the overall income that continues to arrive in your bank account every month.

If you’re already working on a home-based business you’ll find what I’ve shared essential to taking your business to the next level and beyond.

Many of you may just be looking for a way out of a J.O.B. (Just Over Broke) but don’t know where to start.

Entrepreneurship can be horribly confusing when you’re starting out and don’t have the support of someone who’s been there and made it work.

Here’s a simple question that will start you off in the right direction.

If time and money was not an issue, and I mean none at all, what would you do?

What do you feel is your life’s purpose?

I’d like you to take as long as you need to think about this question.

When you have an answer that makes you emotional than you’re probably very close.

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Gordon Attard’s Home Based Business Blog
Skype: gordy05
Email: Gordon@GordonAttard.com
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