Earn Residual Income...
There are two types of income : Linear Income and Residual Income.
Without knowing the terminology, you already know what linear income is. That is when you trade your time for money. This is how almost everyone makes money. If you possess special skills, knowledge or talent, you will receive more money for your time, even if you are a professional athlete , doctor or lawyer, you must work to be paid.
Most of us trade time for dollars. We work once and are paid once. That is fair and just the way to earn a living - but it falls short of the ideal. If you stop working - regardless of the reason - you stop earning money. Thus, If you become ill, injured, unemployed or retired before your have substantial reserves built up, you are in trouble.
The main limitation of linear income, is that no matter what you do, you are trading your time for money.
If you work more to earn more money, you trade even more of your time away. That may leave you with enough money to do things that you always dreamed of, but you might not have the time. In the other way round, if you want to work less to pursue your dreams, you may not have the money to pay for them.
Residual Income is continuous or recurring monthly revenue, which is also called Passive Income.
Residual, or passive income is an important financial concept that is rarely taught in schools. This is unfortunate because it is the key ingredient to wealth building.
Robert Kiyosaki explains in his best selling book, "CashFlow Quadrants," that the only way for an average person to become financial freedom is through building systems or assets that generate residual income.
Rental income from property is one of the way to earn residual income. Another example of passive income is selling a service that is automatically billed monthly. (Think of health club memberships or cell phone service). The service was sold once, yet the people who subscribe to the service pay every month regardless of whether they used it or not.
When you earn residual income, you do something once but are paid over and over for it.
We have to find a way to earn residual income. Find your first one, get it going, and then find another, then another. Use the money you earned from your first source of passive income to invest in others. Another leading financial author, Robert Allen, calls this as "multiple streams of income". Wealthy people often have several sources of residual income that they use to achieve financial freedom.
Robert Kiyosaki points out that if you build your sources of residual income to the point where they are equal to or exceed your expenses, then you become financial freedom. When the freedom comes, you then have more options. You could walk away from you linear income source (job) and still have your expenses met. Perhaps you could reduce your working hours and spend more time with your loved ones or pursuing other dreams.
When you earn residual income, you experience financial freedom because you then have time and money.
Without knowing the terminology, you already know what linear income is. That is when you trade your time for money. This is how almost everyone makes money. If you possess special skills, knowledge or talent, you will receive more money for your time, even if you are a professional athlete , doctor or lawyer, you must work to be paid.
Most of us trade time for dollars. We work once and are paid once. That is fair and just the way to earn a living - but it falls short of the ideal. If you stop working - regardless of the reason - you stop earning money. Thus, If you become ill, injured, unemployed or retired before your have substantial reserves built up, you are in trouble.
The main limitation of linear income, is that no matter what you do, you are trading your time for money.
If you work more to earn more money, you trade even more of your time away. That may leave you with enough money to do things that you always dreamed of, but you might not have the time. In the other way round, if you want to work less to pursue your dreams, you may not have the money to pay for them.
Residual Income is continuous or recurring monthly revenue, which is also called Passive Income.
Residual, or passive income is an important financial concept that is rarely taught in schools. This is unfortunate because it is the key ingredient to wealth building.
Robert Kiyosaki explains in his best selling book, "CashFlow Quadrants," that the only way for an average person to become financial freedom is through building systems or assets that generate residual income.
Rental income from property is one of the way to earn residual income. Another example of passive income is selling a service that is automatically billed monthly. (Think of health club memberships or cell phone service). The service was sold once, yet the people who subscribe to the service pay every month regardless of whether they used it or not.
When you earn residual income, you do something once but are paid over and over for it.
We have to find a way to earn residual income. Find your first one, get it going, and then find another, then another. Use the money you earned from your first source of passive income to invest in others. Another leading financial author, Robert Allen, calls this as "multiple streams of income". Wealthy people often have several sources of residual income that they use to achieve financial freedom.
Robert Kiyosaki points out that if you build your sources of residual income to the point where they are equal to or exceed your expenses, then you become financial freedom. When the freedom comes, you then have more options. You could walk away from you linear income source (job) and still have your expenses met. Perhaps you could reduce your working hours and spend more time with your loved ones or pursuing other dreams.
When you earn residual income, you experience financial freedom because you then have time and money.
