What a great article . I have seen my mother and stepfather ride the roller coaster of MLM for 20 years and it was feast or famine even if you are one of the best salesmen in the world like my step father and con man Sherman Unkefer. One of the best examples is Xango that was a super huge juice craze that preached the residual income lie. Most all of the Xango heavy hitters in the day are long gone after the juice craze fizzled(no pun intended). I was privy to the Xango statements as a beneficiary of my moms trust and it was a continual nose dive in so called residual income . And another thing that they don’t tell you in MLM is that you have to constantly recruit recruit and recruit new members to keep the income flowing . Unkefer worked 80 plus hours a week to try and keep new suckers coming in. That is why the life long MLM hucksters are like Vampires, they constantly need new blood(victims) so they can keep living. These are some of the most evil sick people out there. Trust me I have seen it all.
Vanguard: Vanguard has a minimum of $50,000 and a fee of 0.3%. Rebalancing is done automatically once every quarter and tax loss harvesting is done on a client-by-client basis. We included Vanguard because clients who invest between $50,000-$500,000 have access to a team of financial advisors. Those with accounts over $500,000 will have a dedicated advisor.
Residual Income equals net income minus opportunity cost. So in the stock trading example, your residual income is $4,000 minus $6,000 or negative $2,000. As you can see, an investment can produce negative residual income even if it helps your money grow . A negative residual income means that you could have done better by another, risk-free approach. Some analysts refer to residual value as Economic Value Added. If your residual value is negative, you are not truly adding value with what you are doing.
My esteemed marketing colleagues initially balked at the idea of creating products that generate royalties, so I can understand how creating something from nothing might be daunting for those who aren’t even in creative roles. However, realize there is this enormous world out there of photographers, bloggers, artists, and podcasters who are making a passive income thanks to the Internet.
No one should turn down wind farming’s ultimate passive income for the next 30 or more years … even 60 years when there is a positive cash flow on the sum total of all base payments when computing inflation for the next 60 years based on the previous 60 years, as long as the next era’s energy resource is not perfected (at which time they would not renew the option for the second 30 years).

Leveraging the internet to create, connect, and sell is something every creative person should attempt to do. The only risk is lost time and a wounded ego. You can start a site like mine for as little as $2.95 a month with Bluehost and go from there. They give you a free domain name for a year. Forget all the add-ons. Not a day goes by that I’m not grateful for my site.

It’s obvious that stocks outperform real estate in terms of capital gains, but I would like to see S&P compare to Real Estate in SF, Manhattan, LA. Our house in NC was $80,000 20 years ago. It’s only $150,000 now. Same house in Santa Monica went from $200,000 to $1.8 million. People who happen to bought real estate in major metropolitan would have a natural positive association with real estate investment.

What if the manager of the Idaho investment center wants to invest $100,000 in new equipment that will generate a return of $16,000 per year? This would provide residual income of $4,000, which is the amount by which it exceeds the minimum 12% rate of return threshold. This would be acceptable to management, since the focus is on generating an incremental amount of cash.
Start an affiliate marketing website: This passive income model works for individuals who already own a bog or website. Here, your business goal is to contact companies and offer to tout their products and services, usually for a fee or a commission, based on the number of page views you get. Studies show that more people spend time online and less watching TV or reading the newspaper. Take advantage of that leverage and earn income from the tens of thousands of companies who want to reach an audience - maybe your audience. Either reach out to companies directly or go through a site like ClickBank, which offers affiliate marketing opportunities.
People who are making a living with residual income typically create a full-time income from more than once source. In this way, if one of their income streams gets cut off, they will manage their others and perhaps even branch out a bit more. A passive recurring income stream doesn’t have to be isolated to one venue. Because it nearly runs itself, you are provided the freedom to test and evaluate other sources of recurring passive income.
I just started out with Affiliate Marketing (idea # 8) and it is not as easy as people make out to be. For me, the hardest part so far, is learning Search Engine Optimization (SEO) and driving traffic to my website. I’m only 3 months into it, but I am confident that the site will begin to generate some incom., I have to give it 6-9 months, so we’ll see.
Thus, the residual income approach is better than the return on investment approach, since it accepts any investment proposal that exceeds the minimum required return on investment. Conversely, the return on investment approach tends to result in the rejection of any project whose projected return is less than the average rate of return of the profit center, even if the projected return is greater than the minimum required rate of return.
Of course, there are large fast-food, pet store, and other enterprises that cost a great deal. However, consider a DVD rental machine, soda, or gum ball machines as more passive avenues to income. These require little maintenance, coins, bills, or revenue collected via credit cards, as well as periodic refilling of machines.  These machines are, perhaps, one of the more lucrative paths to a passive income with little input from you.
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Ask yourself how many hours a week do you spend sitting in silence, coming up with an idea and working on your idea? We’re so busy with our jobs that our childhood creativity sadly vanishes at some point in our lives. There are food bloggers who clear over $15,000 a month. There are lifestyle bloggers who make over $10,000 a month while living in Thailand. And there are even personal finance bloggers who’ve sold their sites for multi-millions.
I’ve built several businesses since 2008 using one or more of these models. I’ve been featured in magazines and articles across the globe, and since I started my journey I’ve generated over $5M in earnings from these businesses. All of my income and expenses for those businesses dating back to October 2008 have been tracked publicly on SPI.com. You can see 10 years of income reports here.
I have had a LC account for almost 2 years. Invested 5k. A lot of very small loans. Unfortunately I had to invest though Folio FN. The fees reduce your return. Now, they are not even allowing that. My interest and return of principal are not being reinvested. I talked with LC and they are working on it for my state. Even if I can obtain access to the prime portfolio, I would only place 10 percent of my cash here and would reinvest for at least 3 years. I am still concerned about what would happen when a recession hits.

Many people in the investment world also define residual income as revenue stemming from a passive source. This revenue is created without a direct input of effort or time. The investment itself creates addition revenues without having to be managed. Some examples include royalties, dividends, interest, and rent. Take a dividend stock for example. Once the money is invested once, it will keep producing a dividend every year without having to input additional time or resources. This concept is the Holy Grail for most investors.


When I started building my architecture-related business in 2008, I made my first dollar through advertising. I’d spent a lot of time and money building the site and getting traffic. Then one day I threw an ad on the site one day, and I made $1.18. Sure, I could find that much under my couch cushions—but that’s not the point! The point is that I was able to build something online, put an ad up, and make money without having to do anything. I learned it was possible, and it motivated me to move forward.

Earn residual income through referring consumers to an established product or service. Use your site to advertise to the company or companies you are interested in providing referrals for. Referral efforts can be coupled with informative e-books, seminars, or articles about the product or service. Build your newsletter lists in the same manner, the difference being that you are directing consumers to a third-party business.
And, as your self-esteem improves, you will become more and more passionate about your new business. This will show in your work and will be evident to your new clients, your content marketing, personal or company branding and more. Six figure income earners already have this confidence and thereby, continue to make more and more money. We often say, “the rich get richer and the poor get poorer” but, why do you think that is? The rich are willing to not let fear stop them, think a bit outside the box and take that risk.

Well it all depends on what matters to you most. If you want reliability, security and hassle-free then a linear income is the way to go. If you want an income source that will pay off in the long run, then residual income is the better option. It’s pretty obvious which one most people choose – your traditional 9 to 5 job, being a linear income. Trading your time for your money isn’t a flawed system, in fact, it works very well for some people. But things are changing. With the age of the internet means greater opportunity and many are now looking for ways to spend less time working and more time living – and residual income let’s you do exactly that. Thankfully, earning a residual income is not only limited to investors and business owners – even you can do it!
As you may have noticed, the residual income valuation formula is very similar to a multistage dividend discount model, substituting future dividend payments for future residual earnings. Using the same basic principles as a dividend discount model to calculate future residual earnings, we can derive an intrinsic value for a firm's stock. In contrast to the DCF approach which uses the weighted average cost of capital for the discount rate, the appropriate rate for the residual income strategy is the cost of equity. (Learn the strengths and weaknesses of passive and active management when trying to uncover the overall market's worth. Check out Strategies For Determining The Market's True Worth.)
Now that you’ve chosen your market, find a way to start sharing your message, whether it’s a blog or podcast or Youtube channel, or whatever platform makes the most sense for your target market. Flynn says this is where you’ll start to build a fan base — and collect subscriber emails. You don’t need to get the whole world to follow you to make this work out financially. Wired cofounder Kevin Kelly wrote an article about 1,000 True Fans, which basically says that if you have 1,000 people paying you $100 a year, that’s a $100,000 a year. “You don’t need to serve everybody,”  says Flynn.
Keeping an accurate record of expenses and income is important for any business owner. However, accounting is not a skill everyone has (or enjoys.) Bookkeepers can integrate affiliate links into their packages, or work with a company like Xero, that has a partner program. Thought the details of these partner programs vary, often a service provider receives credit when a client signs up for an account and grants access to the service provider. Greencloud Bookkeeping features buttons on their services page showcasing their partner programs. You can learn more about becoming a bookkeeper here.
We’ve discussed how to get started building passive income for financial freedom in a previous post. Now I’d like to rank the various passive income streams based on risk, return, and feasibility. The rankings are somewhat subjective, but they are born from my own real life experiences attempting to generate multiple types of passive income sources over the past 16 years.
I have only dabbled in drop-shipping before when I had an eCommerce platform 6 years ago or so. I think it is something that you could do on the side, but you would want to do in depth research on the industry you want to get into before setting up shop. It may be a little less passive up front, but over time you could take your hands off the wheel.
Develop a website to purchase and then sell services, such as content articles or purchasing a product at a low price and then reselling it.  Another option is to sell the web design service. Sign a contract with an expert and sell the service to others. This type of business is low-risk and has virtually no start up costs. Sites such as eBay or Etsy.com offer products that can be purchased at a very low cost and then resold to gain a profit.
A linear income is when you trade your time for money. It’s also known as a work income. The paychecks that you receive are based on the amount of work you do. In this kind of income, you are required to put in hours of work every week. If you stop working, you also stop earning. Hence, linear income requires you to continue working in order to keep earning an income.
I think also a very good way to earn a nice passive income is investing in Cryptocurrency, especially in Masternode Cryptocurrencies, which provide a passive income in coins, also those carefully picked coins grow in value, so it’s a double gain! And a great coin to invest in at the moment is GINCOIN, which is the fuel for a really succesful project. Find more at GINCOIN Website: https://gincoin.io/ 😉
The churn rate of downlines is only exceeded by the churn rate of customers (that aren’t already participating in the MLM of course). Sure, Aunt Mary may give you an initial sale just to get you started, but eventually even she stops buying. But those few sales, plus the other expenses MLMs charge their reps, is enough to sustain the corporation. However, this system is only sustainable if the rep force continues to turnover.

Basically, an affiliate connects a customer with a desired or needed product. The affiliate is responsible for marketing to drive sales to the retailer. It is best to purchase a domain name and build a user-friendly website to draw customers and convert them to purchasing the chosen product. Build interest through pay-per-click advertising, content articles about the product, and through posting on forums with a relevant website link.


Appeal to a target audience through offering regular newsletters about the service or product only you can provide. Offer some free advice on marketing or tips on business-related tools. Offer the first part of a how-to e-course free to generate traffic. Through brief, yet constant contact, your blog becomes invaluable to your audience. Don’t be timid in offering a bit of free advice to build a dedicated audience.

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.
What if the manager of the Idaho investment center wants to invest $100,000 in new equipment that will generate a return of $16,000 per year? This would provide residual income of $4,000, which is the amount by which it exceeds the minimum 12% rate of return threshold. This would be acceptable to management, since the focus is on generating an incremental amount of cash.
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