Passive Income: Building Wealth One Stream at a Time

When someone talks about passive income, they could be referring to any number of possibilities. But the basic concept is: instead of working for your money, you make money work for you.

An example of this is putting money into stocks and bonds on which you then collect dividends every month. Another example is being the beneficiary of a trust or foundation that pays you money on a periodic basis.

Passive income is often confused with residual income. However, with residual income, you still have to do some work in the beginning.

The best way to understand residual income is doing something right one time and getting paid on it for a long, long time.

Some of the most well-known sources of residual income are royalties. If you are a best-selling author, you write a book once and it gets sold to millions of people. You don't just get paid once for it, though. You get paid a percentage on every book sold for as long as it is in print.

It works pretty much the same way if you are a songwriter: you write a song once, and if it is a hit, not only get paid on the record sales themselves, but also whenever your song plays on the radio!

Okay, so not everyone can be a best-selling author or have a song on the top 40. So how does everybody else earn a residual income?

If you're like most people, you have to work for a living. If you don't work that day, you don't get paid. A lot of people don't have a residual income.

For example, if you are a surgeon, every time you open someone up, you get paid. But if you don't go into work the next week, not only do you not get paid, but you still have to pay your malpractice insurance.

Or let's say you are a high-paid construction worker. When you go to work, you get paid. Once the building is complete, there is no more work. That's how most of us earn our money.

It is the difference between linear income and residual income.

What we would like to do is to have a residual income coming in every month just so if we decide we don't want to work for a week, we still have money coming in to make life pretty good.

According to Robert Kiyosaki and Donald Trump, one of the best ways to earn a residual income for the average person is network marketing. The good news is, you have been doing network marketing since you were five. Everybody has.

In fact, every time you recommend or promote something to someone else, you are network marketing. You are just not getting paid for it.

I've said it once and I'll say it again regarding network marketing. There is a totally new way of doing things and it does not involve chasing your friends and family (although you should always tell them what you are doing so they don't get mad at you later when you make a bunch of money). The two books I recommend reading on this subject are Magnetic Sponsoring by Mike Dillard and The Renegade Network Marketer by Ann Seig. These two texts will give you a great foundation on which to build your empire. Yes, I said empire.

Once you find a good residual income source and put it into place, you are going to want to get it working for you before adding another one. Yes, you want more than one. Why? Because that is how wealthy people operate.

You see, the rich have multiple income streams and always have. In other words, they do the work putting one together until it automatically makes them money, then they do it again. And again. There is no limit to the number of passive income streams you can have going at any one time.

Hopefully you caught onto the real secret of residual income. Sooner or later, residual income becomes passive income. That's right! Once you achieve a level of success with your residual income sources, you never have to work at them again. Ever.

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