The first is linear income. Although you may or may not have heard of this term,chances are,this is the type of income you currently have. Linear income is money you make by trading your time. Think of any job you have ever had. If you got paid by the hour or even on salary,then it was linear income. This type of income is fixed since you only have so many hours in a day. Even if you are a doctor making $700,000 a year,you are still limited to the amount of patients you can see in a day. With linear income,the downside is that once you stop working,your income will stop as well. The upside is that you can count on producing an income for every hour that you put in.
The second type of income is residual income. Unlike linear income,this type of income isn’t fixed. This means that you aren’t limited to the amount of time that you have. The reason is because you are able to produce the income even if you don’t put in the time. This may seem impossible but think about your savings account. You put money in there and earn interest on it each and every month. Sure,the amount you earn may be insignificant but the fact is that you increased your net worth without putting in any extra time. To give you another example,think of song writers or authors. They produced a piece of work once and are able to reap the benefits over and over again for years and years to come.
With residual income,you can literally retire without even being a millionaire. All you need to do is find out how to produce enough of it to offset your monthly expenses. Someone with a $100k job will need to continuously work in order to produce that amount of income. If they stop working,their income stream will stop as well. And if that happens,they will be in trouble. Even if you had $1 million,it will only last you for so long. If your expenses are $5k for example and you made $5k in residual income each month,you can stop working and live the rest of your life in retirement even if you aren’t making as much as someone who is bringing in $100k a year.
This is the power of residual income. Now that you know what it is,it’s time to find out how to actually build it. There are lots of ways you can do this and one of the most powerful ways is to create an internet business. The reason why is because compared to a traditional business,the start up cost is usually less. On top of that,your “store”will be open 24/7 to people from all around the world instead of just in your local neighborhood like you would with a brick and mortar business. There is a learning curve with an internet business though. You will need to be able to create websites and more importantly,drive traffic to them. Fortunately,there are many great websites that will show you how to succeed with your internet business so take the time to learn from them.
Once you know what to do,you need to put in the work. If financial freedom is at all important to you,then make creating enough residual income to retire on your number one goal. Once you reach that point,life will become a lot more interesting.