If you don’t know the differences between residual income and linear income, then you definitely need to read on. Knowing the difference will change the way you think, and it will change your decisions on the best way to acquire and build a lasting income.
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These income concepts are what divide the rich and the poor, the wealthy and the struggling middle-class, the knowledgeable and the ignorant. Linear income and residual income are the two ways that people make money in the world. This page will show you which income concept is best, or let’s just say, preferable.
First off, let’s address what is understood to be linear income. Employees, independent contractors, and self-employed business owners make up the linear income bracket. Linear income earners are only paid for the specific time expended or paid directly proportional to the number of hours invested in their job. Linear income earners must be physically present or “clocked in” to get their paycheck.
Now here’s the biggie about residual income vs linear income!
Linear income earners cannot leverage their time and efforts. Leveraging is what creates the wealthy/rich social class, and the absence of leveraging is what creates the middle to impoverished social classes.
If you’re self-employed or if you are an employee, you do have control of your personal achievement which is great, right? Now tell me this, what happens to your business or job if for some reason you can’t work or you have to miss work. The result is no paycheck. This is Linear Income.
Now, the alternate income bracket is the Residual Income Earner. I’ll let you decide which is the better of the two.
Residual income is really the best Way of Life. It’s a steady, reliable stream of income not directly dependent on the hours you work. Successful investors enjoy such freedom. Successful book authors get paid even when they don’t write. The checks just keep coming uninterrupted, even when you relax. This is much better than hourly work. Much better than salaried work.
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Examples of Residual Income:
Savers earn interest
Songwriters earn royalties on their music
Authors earn royalties on their books, audios, and videos
Insurance agents earn commissions from their customers
Franchisors get franchise fees
Actors get royalties
Never Ending Income
Network Marketing gives you residual commissions
Residual income is the best form of income. Building an Internet Business that provides you with residual income can place you in a Never-Ending Income position for life.
Robert Kiyosaki, after retiring at the age of 47, wrote Rich Dad, Poor Dad, which has been on The New York Times best-selling list for more than six years straight and sold more than 20 million copies. The success of Rich Dad, Poor Dad paved the way for the Rich Dad series of books – currently 10 books total.