Residual income or Active income?

You have probably heard the expression that “the rich get richer while the poor get poorer.” The reason it happens is because the rich focus on a completely different way of earning money. There are thousands of stories about poor people who accumulated great riches and this choice is available to you if you are reading this. Daymond John, Warren Buffett, the late great Prince, and Oprah were not born into riches. Yet over their lifetimes they’ve amassed huge personal fortunes. This is because they understand and use the power of leverage through residual income like we’ll talk about today. What Is Active Income? Active income comes as a direct result of our efforts. This is when we work for one hour and get paid a certain amount for that hours work. This can be seen in wages, salaries, and self-employed service providers like lawyers or doctors. There are many people who get paid vast amounts of money to become the CEO of a company, play professional sports, a musical performer or star in a movie. Earning a high active income is often a lot of hard work and requires a dedication beyond most of us. It’s also limited because no matter how much money you get paid you still need to show up to work to earn your money unless your have a contract that pays you for reruns or copyrights. What Is Residual (Or Passive) Income? Residual income is when you continue to get paid after the work is done. This includes royalties from books, movies, or songs and also income that comes from real estate or business investments where you don’t actually have to be present to earn it. For example, Bill Gates is still making a residual income from Microsoft even though he isn’t working there anymore. Residual income comes from building an asset that continues to pay you after the work has been done. A book, movie or song is an asset to the people earning royalties from it. A house is an asset to the landlord being paid rent and a business is an asset to the business owner who does not need to be involved in the day-to-day activities anymore. The Passive Income Myth Many people talk about passive income and create the impression that you never have to do anything to keep that income going. The truth is that no business and run it self, you will normally have to keep your eye on things if you want it to run smoothly. For example Daymond John doesn’t run any of the companies he started but he goes over the numbers each day to make sure they’re performing well and calls the CEO if there are any problems.

There is also an idea that we should work to build a passive income asset and then sit on the beach relaxing for the rest of our lives. The truth is that most people would get extremely bored with this scenario and will be eager to find something to do. That’s why the world’s billionaires continue to work… they love what they do and it stopped being about the money a long time ago. How To Build Residual Or Passive Income The key idea here is leverage. You must be able to leverage other people’s time or other people’s money in order to create a residual income. people like Daymond John can run 20+ companies because he isn’t actually running all of them at all. His CEOs are. To create residual income, you need to create something that people will continue to buy on a regular basis long after you’ve created it. A house is a prime example of this as people will continue to pay rent for the right to live in the house. A business needs to have products that are sold over and over again rather than trading the business owner’s time for money. The products might be an item that has been created and can be duplicated or it might be the time of other people. For example, a dentist can only make so much income trading their time for money but when they bring on other dentists they will start to leverage their results to build residual income. Another examples are a barber who owns the shop and rents out booths to other barbers. A cellphone company that provides monthly mobile service to it customers who pay their bill each month, the company only had to do the sell the service one time. The First Steps To Creating Residual Income The first thing is to be aware of how you work for active or residual income. Then you want to decide a path that transitions from active to residual income over time. It’s hard to start a new business and create residual income tomorrow so you have to have some patience. You will need to associate with people who have a like mindset you will loose friends and people will think something is wrong with you. Everyone will not see what you see and that is okay because when they see your life style change because you made the choice to start your own Multi level Marketing Business they will wish they could do what you decided to do, take back your life. As you make more residual income you can start to scale back the hours you put into active income. This will mean your residual income will grow even faster once you pay it more attention. As Jim Rohn was famous for saying: “I’m working full-time on my job and part time on my fortune. But it won’t be long before I’m working full-time on my fortune. Can you imagine what your life will look like?” If you want to have more out of life then working for wages and learn what we do to create wealth click here