However, you should pick a niche and blog about that. If you're launching a money related blog, maybe it'll be about how to make money in real estate or simply how to make money online. Pick the niche and stick to it. If it's a diet and fitness related blog, maybe the niche is the Ketogenic diet, the Atkins diet or some other form of diet or fitness.


Residual income is different from a salary, or linear income, which is paid out strictly based on the number of hours a person works. Someone who works on a salary is often said to work “paycheck to paycheck.” This is because he pays all of his bills with his first paycheck and then must wait until he gets paid again to have more money. Ideally, someone will work hard building up a business so that he can enjoy the residual income once his goals have been met. Then he can work on additional projects while still earning money from his business.
The appeal of these passive income sources is that you can diversify across many small investments, rather than in a handful of large ones. When you invest directly in real estate, you have to commit a lot of capital to individual projects. When you invest in these crowdfunded investments, you can spread your money across many uncorrelated real estate ventures so individual investments don't cause significant issues.
But when so many turn down leasing one and one-half acre for one Wind Turbine for each 80 acres, that lease certainly does not materially affect the rest of the Farm or Ranch grazing pasture and the lease pays much more than the farm crow or grazing pasture lease, just because some lawyer said the lease was too long: 30 years plus 30 year option = 60 years, and the wind turbine company has selling production/electricity contracts for the next 150 years – which is needed to obtain financing!
Many people talk about passive income and create the impression that you never have to do anything to keep that income going. The truth is that you will normally have to keep your eye on things if you want it to run smoothly. For example Richard Branson doesn’t run any of the 400+ companies he started but he goes over the numbers each day to make sure they’re performing well and calls the CEO if there are any problems.
Almost all of these ideas require starting a personal blog or website. But the great thing about that is that it's incredibly cheap to do. We recommend using Bluehost to get started. You get a free domain name and hosting starts at just $2.95 per month - a deal that you won't find many other places online! You can afford that to start building a passive income stream.
Successful YouTubers choose a theme for their channel—ranging from humorous commentary to gardening. As you acquire subscribers to your channel, your number of views becomes more consistent, which in turn grows your residual income. While you’ll need to produce regular videos to maintain your following, a couple hours of filming and editing pales in comparison to the revenue you can generate with minimum effort.
Many individuals may be seriously overestimating how much money they need to start investing in passive income properties. It is true that it may require millions for some to retire. However, as Harvard Business has recently reported; if investors focus more acutely on income versus nest egg size, they may achieve more with less. This is specifically true for those that intelligently use leverage. In real estate, for example, you can quickly scale to controlling millions of dollars in property, and their cash flows.
The reason I consider dividends artificial and believe they don’t matter is because you can just as easily reinvest your dividends. If a stock is worth $100/share, I don’t care if it issues a $1/share dividend or if the share price instead increases to $101/share – either way, I have the same amount of money, because there’s no difference to my net worth whether I take the dividend or sell part of a stock.
In 2012, even I wrote a 150-page eBook about severance package negotiations that still regularly sells about ~35 copies a month at $85 each (2nd edition for 2017) without any effort. In order to generate $2,975 a month or $35,700 a year in passive income as I do now, I would need to invest $892,500 in something that generates a 4% yield! To earn $10,000 a year in passive income would therefore need roughly $250,000 in capital.
If you like to be involved in the financial markets but have no interest or time to pick or analyse stocks, a good proxy can be dividend investment funds in the form of exchange traded funds or unit trusts. This put your funds in the hands of fund managers to pick out dividend stocks with dividends being paid out to unitholders. Similarly, there are exchange traded funds invested in basket of income instruments such as REITs with the dividends being paid out. For such diversified instruments, your risks is broadly market risks and volatility resulting from market fluctuations and industry wide risks.
I truly believe generating $10,000 a year online can be done by anybody who is willing to dedicate at least two years to their online endeavors. Here is a snapshot of what a real blogger makes through his website and because of his website. Roughly $150,000 a year is semi-passive income followed by another $186,000 a year in active income found through his site. Check out my guide on how to start your own blog here.

To create residual income, you need to create something that people will continue to buy on a regular basis long after you’ve created it. A house is a prime example of this as people will continue to pay rent for the right to live in the house. A business needs to have products that are sold over and over again rather than trading the business owner’s time for money.
​Network marketing, or multi-level marketing, seems to be on the rise. Companies such as Young Living Oils, Avon, Pampered Chef, and AdvoCare are all multi-level marketing companies. You can earn passive income through network marketing by building a team underneath you (often referred to as a down line.) Once you have a large team you can earn commissions off of their sales without having to do much.
The net operating income is the amount of money that has been made once all of the person’s expenses have been subtracted from it. For instance, in order for an author to determine his net operating income, he would have to deduct the costs involved in creating the book from the amount that he earned. Designing the book cover, editing the book, and publishing the book are all examples of these kinds of expenses.
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Secondly – and this is just quibbling – I’d change that risk score. The risk of private equity is incredibly high and should be considerably riskier than bonds! You are providing a typically very large amount of capital to one business that you agree to have no control over, and the success or failure of that business over a locked, predefined term determines your return. And in the few deals I’ve negotiated for clients, my experience has been that there are often management fees, performance fees, etc. that may cut into your potential gains, anyway. You’re putting a lot of eggs in one basket, and promising an omelet or two to the management no matter what. You really need to be confident that you found the next Uber before you take this giant risk!
Bonds are traditional fixed income instruments used by accredited or institutional investors to generate income. One large limitation of corporate bonds to retail investors tend to be their unit size, where the minimum investment amount is $250,000 per tranche. In view of this, corporate bonds tends to be out of reach for most retail investors. Another potential pitfall tends to be concentration risks for retail investors, where a substantial portion of the investment portfolio is allocated to a few companies. In the event of a bond default, the portfolio may potentially take a significant hit.
The second form of residual income, passive income, is often a vital part of wealth creation. There are only so many hours in each day, and when a person trades hours for dollars, there is a maximum amount of income that person can earn. For instance, if a person earns a specific amount each hour, there is a limit to how many hours are available to work. Once they reach that maximum amount of time, they cannot earn more money.

However, you should pick a niche and blog about that. If you're launching a money related blog, maybe it'll be about how to make money in real estate or simply how to make money online. Pick the niche and stick to it. If it's a diet and fitness related blog, maybe the niche is the Ketogenic diet, the Atkins diet or some other form of diet or fitness.
Dividend or income investing has been gaining traction in recent years, particularly with the FIRE (i.e. Financial Independence, Retire Early) movement amongst the younger crowd to build up a passive income stream towards financial freedom. In this article, I highlight some of the main financial instruments you can deploy to build up a passive income stream for yourself.

But that’s more like a fairytale. You’ll have to put in some effort to continue receiving residual income on the business you started. Talking to your managers and representatives will help them be more productive and run your business better. Marketing your online sales through social media and your network will help earn you more money. But you just won’t have to work at it as your full time job. Think of it as a part time job that can potentially bring in full time pay.


I knew I didn't want to work 70 hours a week in finance forever. My body was breaking down, and I was constantly stressed. As a result, I started saving every other paycheck and 100% of my bonus since my first year out of college in 1999. By the time 2012 rolled around, I was earning enough passive income (about $78,000) to negotiate a severance and be free.
Residual income is calculated as net income less a charge for the cost of capital. The charge is known as the equity charge and is calculated as the value of equity capital multiplied by the cost of equity or the required rate of return on equity. Given the opportunity cost of equity, a company can have positive net income but negative residual income.
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