Residual Income: 10 Residual Income Ideas to Build Your Wealth

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Most people believe that money is created through active income. They rarely think about passive income or even residual income as a source to generate wealth or financial freedom.

Wealth is thought of as being reserved for those that have the means to create and make money. These may be the rich and famous or even those that have inherited money. Why can’t we be part of those people that are wealthy? What rules restrict us from being able to make this wealth for ourselves and our families?

What is Residual Income?

Residual income is an income that can be passive. The calculation determines how much profit or excess income is available after all expenses are paid off. It is the leftover money we have after we have paid off any personal or business debt.

Residual income and passive income seem to be used interchangeably within the internet world. You go to google to search, and some posts and articles come up with passive income ideas.

Residual Income vs. Passive Income

Let’s get these two things straight. The money that comes from all that work is passive income. Passive income comes from doing work like building a blog, writing posts, and using it to sell affiliates and ads if I were to buy rental properties that create massive amounts of cash flow, once all the work is done and the money comes in passively. You have now done all the work, and the income comes afterward.

Different Types of Residual Income:

Personal Residual Income:

In personal finance, residual income is the disposable income. You can calculate your residual income every month by taking what is left over after paying all debts. This debt-to-income ratio is critical when looking to get loans from banks and lending services.