Residual income can have two different definitions or applications. The first definition, a less common application of residual income, is the money that is left after monthly debts are paid. This calculation is particularly important when a person is seeking financing or a loan based on their income and available money to cover the additional debt. In this scenario, the residual income is calculated by this formula:
Real-estate crowdfunding ($9,600 a year): Once I sold my SF rental, it was natural to reinvest some of the proceeds into real-estate crowdfunding to keep sector exposure. I didn't invest a lot in some of my favorite real-estate investment trusts because I felt a rising interest-rate environment would be a stronger headwind for REITs. But if I could be more surgical with my real-estate investments by identifying specific investments in stronger employment-growth markets, I thought I could do better.

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.
I wish I had more time to put into real estate. Given the run up since 2012, I may even be interested in selling my condo that I currently rent out. I need to get it appraised to really see what it’s worth, but I think conservatively it’s gone up ~50%, although rent is probably only up ~10% or so. I am bullish on rents going up in the future… mostly in line with inflation, or perhaps even slightly faster due to constricted credit and personal income growth which should provide a solid supply of renters. At this point, I just don’t want to manage the property. I’ll probably look into a property manager as my time is likely worth turning it into a nearly passive investment.
Well written piece, but I question the core premise. Why the fascination with maximizing “income” (passive or otherwise). Shouldn’t the goal simply be to maximize long-term after tax growth of your entire portfolio? If this takes the form of dividend paying stocks, so be it. But what if small caps are poised to outperform? What if you want to take Buffet’s or Bogle’s advice and just buy a broad market index like the S&P 500, (no matter what the dividend because you’ll just have it automatically reinvested to avoid the transaction fees).
Since 2008 I've helped hundreds of thousands of people get started with their own online business—and here's the common denominator: Everyone starts from zero. So, if you're feeling behind—don't worry. I'll catch you up quickly with what you need to know. Let's start with what this thing called "passive income" really means, and is it even possible?
Department C has earned $142.5 million residual income as compared to $40 million earned by department P. Residual income allows us to compare the dollar amount of residual income earned by different departments. Since the residual income in both cases is positive, we conclude that both have met the minimum return requirements. However, with residual income is not easy to compare performance.

Writing an e-book is very popular among bloggers, as many have noted that “it's just a bunch of blog posts put together!” You will not only have to make an investment of time and energy to create the e-book, but market it correctly. However, if marketed correctly (through blogging affiliates in your niche, for example), you could have residual sales that last a very long time.
Some people feel fatigued and lack energy, but they're not sure why. Odds are the water you drink from the tap is at least somewhat to blame. There are often additives and contaminants people aren't aware of which can lead to ongoing health problems. Change the water you drink! One of these devices will purge water of impurities, but it’ll retain the naturally-occurring nutrients you need. I’m happy to answer the questions you’ve got about the process, and you’ll soon see the same results for yourself.

Rentals, just like stocks, throw off cash. With rentals we call that cash “rent”, and with stocks we call it dividends. A significant difference however is that the S&P 500 has appreciated at ~6% per year (above inflation) for the last 100 years…..Real Estate has had almost 0 growth above inflation. So are rents higher than dividends? Maybe, maybe not. But unless you got one heck of a deal, the delta in rent over dividends will have a very tough time making up for the 6% per year difference in appreciation.


Obviously, these are much higher than you’re going to get with most other investments. What’s more is that you can choose a plan that matches your investment strategy, whether your goal is Supplemental Income, Balanced Investing, or Long-term Growth. You can also look at different real estate projects and choose for yourself which ones to invest in.
Department C has earned $142.5 million residual income as compared to $40 million earned by department P. Residual income allows us to compare the dollar amount of residual income earned by different departments. Since the residual income in both cases is positive, we conclude that both have met the minimum return requirements. However, with residual income is not easy to compare performance.

When done correctly, investing can be a great way to generate residual income. There are many different types of investments you can choose from to earn income passively — whether you choose to purchase high dividend stocks, try peer to peer lending, or choose to invest in real estate. No matter what you choose to do, make sure you do your research first and talk to a tax advisor to ensure you understand your specific situation and what option is best for you.


This is an ideal strategy if you live in an area where real estate prices are too high to realistically invest in, or you don’t want the hassle and expense of traveling all over the country visiting potential properties. Plus, if you are new to single-family real estate investing, letting a place like Roofstock guide you through the process is a great way to get your feet wet.
I live in NYC where I never thought buying rental property would be possible, but am looking into buying rental property in the Midwest where it cash flows and have someone manage it for me (turnkey real estate investing I guess some would call it). I agree with what Mike said about leverage and tax advantages, but I’m still a newbie to real estate investing so I can’t so how it will go. I have a very small amount in P2P…I’m at around 6.3% It’s okay but I don’t know how liquid it is and it still is relatively new…I’d prefer investing in the stock market.
I read about early withdrawal penalties on IRAs/401Ks very often. Almost always with a statement of “locked up” or “can’t touch” until 59.5. I’m sure you and well informed readers as well know about SEPPs in regard to IRAs/401Ks. For those that don’t SEPPs aren’t perfect but they are a way to tap retirement funds penalty free and I will be using in the future as I have over half of my equity investments within retirement accounts. South of a mil, North of a half. Let me add that I think your blog is outstanding.
It's a relatively simple approach to generating passive income, and a pretty lucrative one at that: A recent survey found that nearly nine in 10 publishers consider affiliate programs to be a key part of their overall marketing strategy, contributing to about 20 percent of their annual revenue on average. However, many publishers can get tripped up when it comes to setting up an affiliate store from scratch. With a variety of programs and products to choose from, how do you know which one(s) will best reflect your site and your audience?

1. The batting cage idea is very risky. I’ve seen many of them close over the years and it is not anything close to passive income if you want to keep the business going. You have to continually promote it and target youth leagues, coaches, schools etc to catch all of the new players who grow up and want to play. I’ve played at probably 8 batting cages over the years and 7 of them closed.
P2P lending is the practice of loaning money to borrowers who typically don’t qualify for traditional loans. As the lender you have the ability to choose the borrowers and are able to spread your investment amount out to mitigate your risk. The most popular peer to peer lending platform is Lending Club. You can read our full lending club review here: Lending Club Review.
And real estate does more than just track inflation – it throws off income (which is important to some people and useful to most). And while your underlying asset is appreciating, the income also grows as rents increase over time. And if you make smart and well-timed purchases, both rents and asset values can increase at well above the rate of inflation.
Perhaps a coworker purposefully tries to make your life miserable because they resent your success. Maybe you get passed over for a promotion and a raise because you weren’t vocal enough about your abilities, and mistakenly thought you worked in a meritocracy. Or maybe you have a new boss who decides to clean house and hire her own people. Whatever the case may be, you will eventually tire.

Now, how do you do it? Building a passive income will require some work up front, but choosing a method that plays to your strengths will yield the most success, and it can even become a fun hobby! Have an aptitude for photography? License your photos to stock photography websites. Or maybe you’ve always wanted to invest? Learn how with a robo-advisor. No matter what your strengths are, we’ve gathered 35 ideas for different ways you can generate passive income and build your wealth.
I wouldn't think of a high yield savings account as a source of passive income but your savings should be getting something (less like Seinfeld syndication residuals and more like a commercial jingle residuals!). It won't make you rich but it's nice if your baseline, risk-free rate of return on cash is 1% or more. The best high yield savings accounts (or money market accounts) offer higher interest rate and there is absolutely no risk. CIT Bank currently leads the pack with the highest interest rate.
Department C has earned $142.5 million residual income as compared to $40 million earned by department P. Residual income allows us to compare the dollar amount of residual income earned by different departments. Since the residual income in both cases is positive, we conclude that both have met the minimum return requirements. However, with residual income is not easy to compare performance.
Quitting your job and jumping head first into your internet niche selling business should not be the first move. Be cautious and intelligent about the financial decisions you make; the internet is not a get rich quick place like it can often be portrayed as, but there are real opportunities out there for people who are looking to grab hold of them, and use them to the best of their ability.
I just wanted to say how nice it is to see such a positive exchange between strangers on the Internet. Seriously, not only was this article (list) motivating and well-drafted, the tiny little community of readers truly were a pleasant crescendo I found to be the cause of an inward smile. Thank you, everyone, and good luck to you all with your passive income efforts!! 🙂

If you are a photographer looking to diversify your income stream, putting together styled stock photo packages can be lucrative. For example, a package of 15 wedding-themed stock photos for $10. You can then market this to any bloggers or businesses who are in the wedding business for their use (photos of different engagement rings styles are super popular). Through this method, it’s possible to make a continuous stream of income off of photos you’ve taken once (similar to a licensing deal).
Risk: The tricky part is choosing the right stocks. Graves warns that too many novices jump into the market without thoroughly investigating the company issuing the stock. “You’ve got to investigate each company’s website and be comfortable with their financial statements,” Graves says. “You should spend two to three weeks investigating each company.”
Nobody gets early FI investing in bonds, CD’s, or even stocks unless they make a huge income or are extremely frugal or a combination of both. Paper assets just don’t provide enough returns. Business income can be great but it is typically not as semi-passive as I would like and there is a relatively high failure rate. That is if you can monetize an ideal to begin with. RE investing needs to be higher ranked IMO as a way that the “average guy” can become FI.
Wow! What an awesome list! My favorite is the stock photography because I love photography. I have had some success there, particularly with one photo I make some decent income from. I think the key with stock photography is finding a shot that is high demand. Then, find a new unique way to frame that shot. This is the reason my St. Louis Arch photo is a top 10 on both ShutterStock and iStockPhoto. Thanks for the awesome ideas above!
We can forecast per-share residual income as forecasted earnings per share minus the required rate of return on equity multiplied by beginning book value per share. Alternatively, per-share residual income can be forecasted as beginning book value per share multiplied by the difference between forecasted ROE and the required rate of return on equity.
I’m feeling inspired! I’ve been a PT for 19 years and I feel I have so much experience to offer but have been so intimated by starting a blog. I also subscribed to Michelle’s website but wasn’t sure it was for real. Is it for real? After reading this I feel like it’s time to take the plunge, I need to start a blog, I have so many ideas and even course ideas. I want to get away from the paperwork that plagues our healthcare system but not leave the field so the blog just might be the answer. I’ve been a landlord for 15 years now, great investment for sure, renters paid for the down payment of our house and should hopefully help pay for our kids college. I’d love to have one more! Thank you for the inspiration, wish me luck with my blogging!
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