how to get residual income

How to Get Residual Income

Everybody is asking about how to get residual income and how convenient it would be. Isn’t it nice to leave your day job or earn on the sides as you go through your life? Of course it is. Residual Income, more commonly known as passive income, is the promised land of investing.  After all, why would anyone trade in a 40 hour work week as an employee, for an 80 hour work week as an entrepreneur if their wasn’t some light at the end of the tunnel.  Residual Income is about building an income stream that brings more cash in your bank account each and every month.  Income that comes with little to no time or effort involved.

Passive or Residual Income can vary greatly depending on the nature of your business or investment.  For example, insurance agents can make residuals from their clients that renew their enrollment, or even renewals several levels down on the team they build.  That model has carried over into the more commonly seen multi-level marketing (MLM) programs running rampant on the internet.  But there is a very wide spectrum when it comes to residual income, and it doesn’t necessarily have to come after a long and tedious path as a struggling entrepreneur.

how to get residual income

Ways of how to get residual income

Here are 5 ideas to start building residual income into your portfolio both as an investor and an entrepreneur. Know the best ways of how to get residual income easily.

  1. Join an AFFILIATE marketing program. This is one of the most common answers to the “how to get residual income” question. Here are some red flags to watch out for so you know you’re not wasting time and money on the next hit and run Ponzi scheme.
  • First, it has to have some service or product that attracts spending oriented customers. The majority of those should be more interested in spending money month after month for the product than interested in the money making potential.  If the value of the business isn’t strong enough on its own, it can often leave your team in the dust once the market grows to competitive.
  • Secondly, the majority of you income should come from your own ability to market rather than depending on your down line. There is a saying “Leaders attract leaders, and followers attract followers.”  You’re going to want to represent the type of business that can maintain its branding and its reputation by only involving go-getters.  By you focusing on what you bring to the table, you’ll actually attract the types of teammates who can generate the residual income you’re looking for.
  • Make sure it’s compliant with Federal Laws. The SEC has shut down quite a few Revshare, Forex, Binary Option, and other pyramid model “businesses.”  In particular, combining commissions with financial services like Forex treads on some very thin ice with extensive policies in place surrounding financial advisory regulations.

 

  1. Start building up rental income. You don’t have to be filthy rich to get the ball rolling as a landlord.  Here are some ideas to get things going.
  • If you already own a home, start renting part of out. You can find a roommate for your apartment, or rent out the basement of your house. This can be a lower risk way to get your feet wet as a land lord.  You’re in a home you are already able to pay for.  Why not get some cash flow back.  Just remember that you should look into speaking with a real estate attorney who can walk you through putting your property under a living trust, and being properly insured. You should also discuss the terms and contracts that will best protect you depending on your location.
  • Take advantage of being a first-time homebuyer. The banks and many programs are available to make the purchase of a home easier as a first-time homebuyer.  These programs typically allow much lower down payments and favorable financing terms.  You’d be surprised how many people could shift from renting to owning without even increasing their monthly living expenses. And if you convert part of your first home into a rental as described above, you could probably lower your costs overall.
  • Look into short sales. Banks aren’t in the business of real estate.  But they get tied up with properties once homeowners become delinquent in their payments.  I live in New York, and if the bank takes over your property here, they’re stuck paying taxes, and maintaining the property.  It also diminishes the amount of money they can lend.  So many times the bank is willing to approve a short sale at a significant discount.  If you’re willing to have a little bit of patience, don’t be surprised if you find a property $300K property that you only have to pay $200k or less for. And you can get a low interest mortgage to purchase an asset at huge discount.  This can be the most profitable for of residual income since you are leveraging bank financing to buy a discounted property, and then generate cash flow off of it.

 

  1. Don’t forget about dividends. The best time to shop for securities that pay a dividend is when the market tanks. This is an easy on how to get residual income.  If you can find a stock where the overall business is just fine, but the market is fearful, it means you can buy a cash flow asset at a cheaper price.  It’s called getting a higher “Yield”  If a stock pays $3.00 per share annual, and sells for $100.00, it’s yield is 3%……but if the market crashes, you may be able to buy that same stock at $50.00 for a 6% yield.
  • One word of warning…..Just because a stock pays a dividend, it doesn’t actually mean that it is a safer investment. Back before the last Stock Market Crash of 2008, GM was going deeper and deeper into debt just so it could afford to pay its dividend.  People’s investment in the company was being put at greater and greater risk, but they didn’t know since all they focused on was the dividend.
  • Try looking into REITs. Here’s why.  When a normal publically traded company issues a dividend, it’s double taxed money.  It’s first taxed at the corporate level as net profits.  Uncle Sam doesn’t car that the company is paying it back out.  But then when you receive those dividends, they also get takes as personal income.  It’s horribly inefficient.  But Real Estate Investment Trusts (REITs) have such good lobbyists backing them, that they convinced Uncle Sam to only tax the income on a personal level.  REITs also can’t hold on to more than a certain % of their net income.  The end result is that you can get a much bigger paycheck.  Many times dividends from these securities can be over 10% annual.

 

  1. Become a limited partner in a private business. This is another way of how to get residual income. A lot of times, somebody has already got the game plan, and the talent.  All they’re looking for is somebody to fork up the cash needed to get the business off the ground.  This can be somewhat risky.  Most investors usually don’t go this route until they have enough capital saved for a more exotic investment….but the returns can be huge.  And since you’re the passive partner,  they handle everything and get you your cut.
  • BEWARE OF PROFIT SHARING AGREEMENTS! I’ve seen greedy business owners take advantage eager amateurs looking to become successful entrepreneurs.  They become so excited at the prospect of getting a portion of the profits just like a real business owner.  And all they have to put in is some sweat equity.  But what they aren’t realizing is that profit is what’s left over.  All of a sudden the real owners start taking out lofty salaries, increasing their marketing budget, and buying more inventory.   And what their victims are left with is an 80 work week that pays less than minimum wage.
  • Remember that Ownership = Equity. If you plan to enter one of these arrangements, you need to demand that you OWN A PERCENTAGE OF THE COMPANY, and that SALARIES DRAWN FROM THE COMPANY ARE CAPPED.  That’s the best way to know that somebody cares about your interests as a legitimate partner.

 

  1. Options are the easiest big money you could ever make. There is absolutely no other investment where you can find leverage, make huge return on investments, and make money whether you’re right or even slightly wrong.  There are numerous strategies used to make consistent cash flow in your portfolio. It could be a pretty convenient method of how to get residual income.  Residual income that comes back to you in order to offset the risk of owning stock directly.  Some of the strategies we use can generate double digit returns monthly, and on a consistent basis when used correctly.
  • Be aware of buying options. We tend to sell for the consistent cash flow, and the buffer of safety we can find.  Buyers do have to be 100% right.  You can make a lot of money with less money at risk.  But there are so many factors that work against the option buyer.  That’s why the options traders who have survived the longest, and have made the most, tend to focus on selling for cash flow.

 

We do realize that a lot of what we just discussed may be over your head.  That’s why we offer free live training to those interested in starting the path of investing.  Since we’re investors first, we don’t think in terms of competition, but rather in terms of finding new partners who we can team up with in the future. Learn the best ways of how to get residual income with us.

 

If you were to find yourself growing curious about how to start with the support and knowledge you need to be successful, please let us know by click here.  We are here for you….

 

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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