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Passive Income Defined

Written by: Chris Simpson

Article Overview: Passive income is money made that you do very little if anything to make. It may be time consuming at first to create the passive income, but once you start getting a steady stream of passive income, you will make money while you sleep or when you are on vacation.

Passive Income Defined

Passive income is money made that you do very little if anything to make. It may be time consuming at first to create the passive income, but once you start getting a steady stream of passive income, you will make money while you sleep or when you are on vacation.

Whether you own your own home based business or work from home for another company, learning how to develop a passive income will enable you to increase your annual earnings and worry less about how your bills will be paid.

There are a couple of different types of passive income. You will have residual income, leveraged income, and active leveraged income. We will discuss each of these in this article.

1. Residual Income

Residual income is money earned when you do something one time, but you are paid over and over again. For example, affiliate marketers earn residual income when someone signs up and pays a monthly fee for a service or program they use every month. For as long as the customer pays the monthly charge, the affiliate earns their residual income. Marketers like this income because they get paid over and over for a presentation or ad that they did one time.

Some examples of residual income would be selling memberships to special report of the month and e-book of the month clubs. When people sign up for these, they order or receive something every month and you receive money each time.

2. Leveraged Income

Leveraged income is where others do the work and you are paid for what they do. The best example for this is an affiliate program. You do all the work to set up the affiliate program and your affiliates take care of all the marketing and advertising. When income comes in, your affiliates are the ones that generated it, but you get paid.

An example of a way to generate leveraged income would be creating your own e-books that your affiliates sell for you. If you are a service provider, another way to generate this type of income is to outsource your work load. You hire someone else to do your work and you pay them a percentage and you take the rest.

3. Active Leveraged Income

This form of passive income is most used by service providers such as business coaches and those who host webinars, online parties, and conferences. While you might have affiliates who promote your services, you are required to be directly involved in helping the clients with your expertise.

Active leveraged income is different from the other two forms of passive income because more of your time is required for helping your clients. But this is an excellent way to get your name known and to have affiliates do some of your marketing for you.

Passive income is a wonderful way to make money and add extra income to your pockets. Each of the categories above offer several different examples of how to earn money. Deciding which plan to choose may be more difficult than actually making the money.

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Article Tags: affiliate marketers, affiliate program, book of the month clubs, e book, e books, earnings, home based business, leveraged income, marketing, money, residual income, service provider, signs, sleep, steady stream, time 2, types of passive income



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Re: What are your success criteria? - [quote="DwayneGarrett":1igrdgib]Out of curiousity, what has to be present for you to know that your business is a success? The top three things for me are: 1. Maintaining a 6 figure income year in and year out. 2. Creating and promoting my own products. 3. Income not solely dependent upon my personal effort. How about yours?[/quote:1igrdgib] I would have to say mine were: 1. Monthly Residual Income that exceeds all expenses by 110% 2. Free time to create and promote my own products (relies on #1) 3. 5% of all revenues generated by my team going to feed starving kids Now that is "feel good work".
Shy People, - Hi Nikki, Why are people shy? They can be either the Passive and Reserved ones or they don't want to be found foolish in the company of other people. Often fear plays a role, because of what other folks thinks about them. There are two groups of shy people: One group likes to meet people to share their concern and emotions, but they can also be critical and mostly reluctant to speak. The other group are task people. They prefere to do it alone and have a lot questions. I believe, the internet is a good portal for shy people. They don't face direct intimidation, therefore they can express themselves without being ostracised. Hope, that helps. Kindest Regards Beat "Unlock People's Potentials!"
What are your success criteria? - Out of curiousity, what has to be present for you to know that your business is a success? The top three things for me are: 1. Maintaining a 6 figure income year in and year out. 2. Creating and promoting my own products. 3. Income not solely dependent upon my personal effort. How about yours?
Internet Marketing Conference on SLife - I've been trying to log in but it keeps crashing.. anyways.. a friend of mine in BC plans on holding Internet Marketing Conferences on SecondLife and have the same top internet marketers that would normally be in Live Internet Marketing conference speak. Income will be generated from admission charges, product sales during breaks, sponsor tables, etc etc.. Just to get the ideas flowing in your head that anything you can do in the real world can be replicated in SL. There is no planned date as of yet for this conference.
$1,000,000 - Hi Evan, Are you talking about US Dollars? If so, that would be approx £500,000 in the UK. The Canadian Dollars differs also from the Australian Dollar. In any case, one needs to solve problems to help people to get money. The more solutions are given to people's needs to solve their problems, the closer one gets. Finally, are we talking about 'Income' or can we talk about 'Asset'? Kindest Regards Beat "Unlock People's Potentials!"


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