Passive Income Can Be Residual Income Or Leveraged Income
Passive income is different to active income in that it does not require your direct involvement. Some of these types of income could be owning a rental property, network marketing, writing and selling a book or collecting royalty for your work.
As you get older you should consider types of income that do not require your direct involvement. You should start looking for these types of income as early in your life as possible as they often take a long time to set up or a constant injection on a weekly basis of your salary.
If you run a home business or you run a small business you should think about creating passive income as fast as you can so you can achieve personal and financial freedom.
There are two types of passive income that we will cover here. Residual income and leveraged income.
Residual Income
Residual income is generated from doing a task once and then reaping the rewards on a continual basis without doing any more work. You could be a photographer sell photos or an insurance agent selling insurance policies. Some of these types of incomes you could sell over and over again to regular customers.
Leveraged Income
Leveraged income involves you delegating work to others to get the work completed. Affiliates promoting products on the internet is a form of leveraged income. You are leveraging others to do the work for you. If you were a contractor who employed sub contractors this would be another form of leveraged income.
Combining leveraged income and residual income can have great benefits and the ideal situation. Now you can look for these types of incomes and build them up to combine with your everyday salary. Diversifying your types of income is recommended and finding these different types of income will bring you financial and personal freedom.
Source: http://ezinearticles.com/
Added: September 1, 2008
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