Other than investing in mutual funds, resources and stocks, there are three main industries that will pay a residual income. They are insurance, investment brokerage and network marketing. Further breaking this down, there is really only one industry that will allow you to continue working where you are working, while developing a residual income part time and that is the network marketing industry.
It may sound like a daunting task, but it can be explained in a simple way. You have to satisfy a need that people have. Do people want a website that connects them to others with a similar interest? Do they want cheaper air fares? Do they want a personalized career path finder? You don’t have to create something new or ground-breaking; you can simply take existing services, and improve them in some way. Or you can create your own.
Investment properties: An investment property is one purchased with the sole purpose of earning revenue. It could be a commercial space you’ll lease out or a residential rental unit. Not only will this type of investment provide potential appreciation and tax benefits over the long term, but it can also provide residual income in the form of monthly rent (after expenses).

Get your basic blog set up. This involves choosing a niche (use the Adwords keyword tool to find out if people are really searching for information in the niche first), registering a domain name, getting a hosting account, setting up your basic blog installation (I recommend WordPress.org), and choosing a theme (design). Rather than go through these steps in detail here, you can follow my instructions on getting WordPress set up over in our 30 day marketing bootcamp series for freelance writers over at QueryFreeFreelancer.com.
It might all seem pedantic but I think the words we use to describe things are important. And calling a business passive when it really isn’t can set people up for disappointment and even failure. It’s not a fair description of the work involved. Sure, you might be able to lounge on a beach as money rolls in but only after you’ve put in many hours of work first and only with the knowledge that you’ll have to sit back down at the computer again at some point to invest further in your business.
While I don’t have any direct experience with it, I know it can be quite profitable, especially in niches where you have high profit margins and low shipping costs. Vitamins and cosmetics, for example, are two popular drop shipping industries. Anyone can theoretically start a “store” and have dozens or even hundreds of products to offer within a matter of days.
Our favorite platform for this is RealtyMogul because you get the flexibility to invest as little as $1,000, but can also participate in REITs and private placements – typically not offered to the public. Investors can fund real estate loans to gain passive income or buy an equity share in a property for potential appreciation. Their platform is open to both accredited and non-accredited investors.
stREITwise offers a hybrid investment between traditional REIT fund investing and the new crowdfunding. The fund is like a real estate investment trust in that it holds a collection of properties but more like crowdfunding in its management. The fund has paid a 10% annualized return since inception and is a great way to diversify your real estate exposure.

One absolute valuation method which may not be so familiar to most, but is widely used by analysts is the residual income method. In this article, we will introduce you to the underlying basics behind the residual income model and how it can be used to place an absolute value on a firm. (The DDM is one of the most foundational of financial theories, but it's only as good as its assumptions. Check out Digging Into The Dividend Discount Model.)
P2P lending is the practice of loaning money to borrowers who typically don’t qualify for traditional loans. As the lender you have the ability to choose the borrowers and are able to spread your investment amount out to mitigate your risk. The most popular peer to peer lending platform is Lending Club. You can read our full lending club review here: Lending Club Review.
Other than investing in mutual funds, resources and stocks, there are three main industries that will pay a residual income. They are insurance, investment brokerage and network marketing. Further breaking this down, there is really only one industry that will allow you to continue working where you are working, while developing a residual income part time and that is the network marketing industry.

I would consider it 50% passive because the portion that generates money from ads occurs at any time. I guess you could also view it as an upfront time investment, but now that you have a following, I’d imagine a lot of the passive portion of the earnings would still come through viewers even if you decided to take some time off blogging! Reading some of the comments here though (traffic dropoff), I guess it is less passive than 50%.
I would like to add, that one of the main reasons why you cannot leave your web properties unattended, is Google. Even for popular content, with time Google sends fewer and fewer visitors your way, if you stop pruning and updating it. There hardly is such a thing as “evergreen content” any more. If you do not update your existing content, you have to keep adding some new content, preferably — every day. That’s where the content-creation plugins with some automatic pre-scheduling capability come in very handy.

The second big takeaway for me, was to pick a niche you know, you find interesting AND where there is demand for your product – ie willingness to buy/pay.  A lot of people only remember the first part of this 2-part formula, and end up creating a blog on knitwear for kittens.  But it’s the overlap of passion and profit that Ferriss stressed so much.
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