What is Residual Income?
By Christina Dodson

In talking with moms who are looking at ways to earn income from home, I’m often asked the question, “What is residual income?”

(I love answering tough questions and “What is residual income?”
is one of those that sound so complicated, but it’s really not!)

My Simple Definition

RESIDUAL income is getting paid over and over for work you’ve already done once before. I like to think of it as royalty income or passive income – the kind that authors, song writers, and celebrities earn (probably because it’s the closest I’ll ever get to being famous)!

Now there are different ways to earn residual income, which I won't go into. Instead, I’d like to share my own experience with you since I’ve been earning weekly residual income now for the past 14 years.

Christina's (Happy) Story

Years ago, when my children were young, I started ahome business that I worked part time while I homeschooled. I later put that business on hold (in hobby mode) until I finished teaching my children; but to my amazement, my checks never stopped! To this day, after all those years, I'm still getting paid - week after week - for that work I did 15 years ago. This is a simple example of residual income.

Now, let’s compare this to my hubby's income...

John's (Sad) Story

John started a corporate job years ago and has earned decent income now for over 25 years. The sad thing is that he’s only been paid one time for each of the countless hours he’s worked down through the years. Those hours are long since forgotten; they served their purpose one time – for a given pay period – and then vanished.

They were spent, not invested.

Why? Because John’s income is LINEAR, not RESIDUAL!

LINEAR income (like a line) has a starting and stopping point. When you start a job, your paycheck is there for you right away; and the day you stop working is the day you stop getting paid. It's that simple.

The disadvantage you face is that linear income always has at least one “limiting factor” that will always keep you from being paid what you’re worth!

It’s sad that John will never be paid for those hours again. They’re gone and his income is forever limited - to this day - by the number of hours he works each week.

On the other hand, since I’ve earned income over and over for all these years, I’ve actually been paid MORE than what I’m worth! Are you beginning to get the picture?

What is residual income?
Income that brings freedom!

I hope this simple illustration causes you to stop and think about your own life. What type of income are you earning? Are you being paid what you’re worth?

If not, I recommend that you seriously think about ways that you can start earning residual income. Ask yourself, “How long will I settle for being paid less than I’m worth?”

And since you have to WORK anyway (nothing comes easy in life), wouldn’t you rather invest your hours by putting time into a program that will  change your future instead of spending your time living for the moment and being paid only for today?

© 2009 Christina Dodson and MomsWorkAtHome.com. All Rights Reserved.