Passive or Residual Income
A few days ago, I discussed Wealth Creation and "Assets". Today, I will be discussing passive or residual income.
What is passive or residual income? It's income that comes from assets you own or create that pays you long your initial investment of time or money. It is really about leverage and multiplying yourself. Working once and being paid over and over.
A business can produce passive or residual income if you can let it stand on its own and you can create a replicateable system-- a cookie cutter, if you will. A "cookie cutter" approach is important if you want to grow, because you can't be everywhere. If you develop a good business model, you want to franchise it . . .
Remember, real wealth is usually built upon passive or residual income.
Examples of passive or residual income include:
- Artwork-- Paintings or prints (even better)
- Craftsmanship-- Fashion clothing or furniture
- Photographs-- Art or stock
- Videos or movies-- How to's, seminars, or full motion pictures
- Books-- Fiction or non-fiction
- Songs
- Poems
- Music
- Websites
- Information Products
- Advertising space
- Software
- Games-- Board or video
- Sales-- Multi-Level-Marketing (MLM) or financial
- Designs
- Inventions
- Rent-- Real estate
- Royalties
- Dividends or interest-- Stocks and bonds
Next, I will be discussing Creating Income Producing Assets . . .
Categories: Wealth, Personal Finance, Investments, Passive Income
Tags: Wealth Personal Finance Investments Passive Income
Good timing. I'm thinking about buying a 3-plex in town or lake front property south of the frost line. The idea is to take advantage of the economic downturn and provide a mechanism to create long term revenue streams that out perform other investments.
I'm leaning toward the lake front property in the south because that would give us a place to spend a couple weeks in the winter months. And, I need to practice my fishing techniques.
Neither one may come to pass, but I am investigating the possibilities carefully before making any commitments.
Clair
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