Creating a Solid Savings Plan: Residual Income vs Investment Income

by WorkFromHome on December 3, 2011

There are two things that shape the way Americans think about their income and their savings: how much money they’re making and how much of a risk they’re taking with their finances. For many people, until recently, the stock market was a pretty safe bet. That’s not a typical characteristic of stock market investments, but it really did seem as if American stocks were on a perpetual upward swing.

All of that changed in recent years; not only have stocks become too much of a risk for many Americans to take on, but the amount of money they earn on an annual basis has stagnated — or even gone down, in many cases. Amid this crisis of confidence and declining salaries, many Americans are left wondering: should I continue my stock market investments or check into other sources of income like residual earnings scenarios?

The Stock Market in an Uncertain Economy

The stock market is simply not what it was during what was America’s most prolonged period of financial growth and sustained wealth. In present times, the economy is going nowhere but down — or up, and then down, and then back up again. This volatility has caused many Americans to reconsider their source of savings or backup income, and rightly so. There is simply no reason to continue taking risks with a retirement account, a college savings plan, or even a general savings pool when so many alternatives exist.

Residual Income Withstands Economic Pressures

The great thing about residual income — and something the stock market simply cannot provide with its investments — is the fact that it just keeps coming, whether or not the economy is in good health or in poor shape. That’s because residual income relies on work being done just once — from there, earnings flow in over time and perhaps indefinitely. These payments, which are sometimes in the form of royalties and can also be earned in the form of commission, are steady and ongoing. They don’t require consumer confidence levels to be at their peak, and they don’t require good economic or employment news in order to continue on an upward trek.

Many Options for Prospective Residual Earners

Residual income is largely based off of a marketable skill, talent, or hobby. Often, people will open their own online business which sells the things they have created. A large number of skilled writers have begun putting their trade to work, writing about skills and hobbies that they are well-versed in. These books are then sold online for a premium, and since they require no publishing or promotion fees, each book is sheer profit for the writer.

Others have monetized their skills into subscription models, providing their vast knowledge only to users who pay a recurring (often monthly) subscription fee to belong to their exclusive website online. These subscriptions require a bit more work in order to remain viable and effective, but their benefits are many: users can simply log on once per month, issue a bunch of new content, and charge a premium for it. Minimal work for maximum profit is almost the very definition of the so-called “American Dream,” and it’s easy to see why this option is so popular among those seek residual funds.

Still another option for residual income earners is to participate in affiliate marketing programs. Those unique programs simply ask the participant to help market a product online. They’ll be supplied with a raft of marketing tools, from textual website ads to banner ads, emails to send to friends, and status updates that direct people to a unique online sales page. Each completed sale that occurs via a referral from the marketing program member earns them a small percentage or flat dollar amount. Once these amounts add up to a “pay-out minimum,” participants can request that funds be transferred to their checking or savings account.

Finally, one of the fastest-rising residual earnings programs is called “network marketing.” This program helps users create residual income by selling a certain product or service, but they can increase their earnings by getting their friends to sell as well. Not only does this breed healthy competition between people and their friends or family, but it helps increase earrings with each new person who joins the program and does their best to make a solid secondary — or even primary — income.

The Key is Doing Research and Getting Started

Residual income essentially gets to a point where it requires minimal work in order to be an effective secondary source of finances. But it doesn’t start that way. In order to secure a solid source of residual income, a good amount of research must be done and you must get into the game as soon as possible. Getting in early helps to maximize your residual profits and your potential for increasing your earnings through referrals and recommendations.

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