Why Residual Income Is Much Better
The following article includes pertinent information that may
cause you to reconsider what you thought you understood. The
most important thing is to study with an open mind and be
willing to revise your understanding if necessary.
Why it's better to have residual income and not solely depend on
paycheck income? Residual income by definition is income earned
by an individual that are generally coming from his assets at
hand. It allows a person not to worry anymore spending 8 hours a
day in the office working as his personal assets are now earning
money for him.
The current practice for people in earning a living is by
getting a job and work either on an hour or annual basis. They
have salaries or paychecks that they receive usually on a
monthly basis and this allows them to buy the things they want,
travel to places they want to travel or simply buy anything that
their paychecks allows them to buy but the happy story ends
where the money has been spent already and people have to
continuously report back for work and continue on with their
current jobs again and again. Their paychecks do arrive again
and again but so does the effort for them to continue working
for that hard-earned money.
People can aspire for higher salaries by getting promoted in
their current companies or they can opt to aspire for higher
paying salaries with other companies. They can get a higher
education, maybe an MBA degree and be assigned to higher
management positions like a supervisor or a manager in a
company. Their salaries become higher and their lifestyles can
become higher too. Still, at the end of the day, they still have
to report for work the next day, get more worries and pressure
from work as they still have to continuously work their way on a
daily basis in order for them continuously enjoy the paychecks
they are receiving that will allow them enjoy and sustain the
lifestyle that they want to enjoy.
This is technically the rat race and it's a cycle in most
people's lives that goes on and on. The cycle of coming to work
doesn't end. This is because people will always have obligations
to pay the bills, to put the food on the table and to simply
enjoy a good weekend doesn't end too.
So how will it be possible for anybody to get out of the rat
race of working 8 hours a day? How will it be possible to simply
just have the money that can sustain the lifestyle one would
like to have and go on with life with the expectations of still
being able to receive continuous income in the bank?
Knowledge can give you a real advantage. To make sure you're
fully informed about residual income, keep reading.
The answer basically lies with being able to create wealth for
oneself not solely on the basis of becoming an employee and
receive a paycheck continuously but simply by being able to have
income coming in the bank without necessarily working for it on
an hourly basis.
This is what we call residual income. Residual income, also what
we call passive income generates income for a person thru his
assets. These assets can be in a form of real-estate properties
that returns rental income. Shares of stock in a blue chip
company that consistently returns back dividends is also a way
to earn residual income. This is also true for mutual fund
shares that consistently return earnings to the fund owners from
the funds' investments.
The process of switching from a lifestyle funded by earned
income from a job to a lifestyle funded by residual income
generated from a person's established assets will be the
challenge for anybody who's currently tied up in the rat race
cycle. Being able to save enough money or capitalize on a
person's talents and skills in order to bring in income
consistently without him returning back to work for good is the
process towards financial independence.
People who have capitalized on their talents and skills and have
settled down towards financial independence are those who have
maximized their residual income potential. Songwriters for
example may only need to write just a few songs that will make
it big on the MTV or Billboard charts that will consistently
sell out record sales for a lifetime will have residual income
by earning royalties for every song they wrote that is played in
the radio or sold in record stores.
Entrepreneurs or successful businessmen that started their
business and capitalized on their business ideas that have taken
off towards success can expect consistent profits from their
businesses. They'll just need to hire effective managers and
people that will continue to run their businesses for them and
they can just expect their businesses to grow and receive
profits from their business operations.
Why residual income is better than all sources of income? Its
because it allows anybody who has initially capitalized on his
efforts to plant his seeds on business ideas, artistic talents,
or investment strategies regardless of his family background,
education, age, or even career background. Residual income
allows financial stability and freedom without the need to be
back at the office the next working day again and simply enjoy
the free time to devote it on their love ones or on the things
that they've always wanted to do in life. Don't limit yourself
by refusing to learn the details about residual income. The more
you know, the easier it will be to focus on what's important.