Exploring Residual Income Possibilities for Your MLM Business
December 7, 2008 – 6:33 am asked:
Anyone who goes into business is looking to create income. After all, having your own business opens up plenty of income-generating possibilities on your part. Plus, you become an independent entity, no longer reliant on another person or company to earn money. With a well-designed business, it’s also possible to earn residual income, an attractive option not always available to many types of employment.
What is residual income?
Most of us, employees, self-employed individuals and some business owners, earn linear income. This is the type of income that is generated after a particular work or project has been completed. It comes in the form of a salary, wage or fee. This type of income, although fair enough, is usually only proportional to the type or amount of work completed. Once that work or project has been completed and paid for, no further income may be expected from it.
Residual income, on the other hand, is a type of passive income, which allows a business owner or business entity to continue to generate and earn, even after the first effort to produce goods or services has been completed. This type of income includes royalties, rent, commissions or interest on an investment.
As an example, let’s consider book authors. These authors earn by producing written work. However, unlike workers who are paid by the hour, authors get paid either through an advance on their books or through a percentage from the sale of their books. Each time someone buys J.K. Rowling’s book, for example, she earns a percentage from the purchase. Ten, twenty years down the line, every time someone buys one of her books, she will continue to earn.
As you can see in this case, a business person’s initial effort is already completed and yet, he or she will continue to earn. This is why being capable of earning residual income is a top priority for many MLM business owners. It not only helps expand their business, it also generates money that could be used for a variety of ways
Anyone who goes into business is looking to create income. After all, having your own business opens up plenty of income-generating possibilities on your part. Plus, you become an independent entity, no longer reliant on another person or company to earn money. With a well-designed business, it’s also possible to earn residual income, an attractive option not always available to many types of employment.
What is residual income?
Most of us, employees, self-employed individuals and some business owners, earn linear income. This is the type of income that is generated after a particular work or project has been completed. It comes in the form of a salary, wage or fee. This type of income, although fair enough, is usually only proportional to the type or amount of work completed. Once that work or project has been completed and paid for, no further income may be expected from it.
Residual income, on the other hand, is a type of passive income, which allows a business owner or business entity to continue to generate and earn, even after the first effort to produce goods or services has been completed. This type of income includes royalties, rent, commissions or interest on an investment.
As an example, let’s consider book authors. These authors earn by producing written work. However, unlike workers who are paid by the hour, authors get paid either through an advance on their books or through a percentage from the sale of their books. Each time someone buys J.K. Rowling’s book, for example, she earns a percentage from the purchase. Ten, twenty years down the line, every time someone buys one of her books, she will continue to earn.
As you can see in this case, a business person’s initial effort is already completed and yet, he or she will continue to earn. This is why being capable of earning residual income is a top priority for many MLM business owners. It not only helps expand their business, it also generates money that could be used for a variety of ways
