I once shared in a post how I was able to make more earnings than expenses. Residual income is even more powerful as it can make you earn money while you sleep, eat, or while you are on vacation. hence, it is otherwise referred to as passive income.
When you look through your bank statements, do you see more expenditures and only a few incomes? That is about to change as you read this post.
With these residual income ideas, you will be able to increase your earnings, establish a passive income stream, and build long-term wealth.
So, if you are interested in learning how to increase your wealth to the point when you don’t have to do extra work but you are still earning daily, this post is the right information for you.
What is residual income?
Residual income or passive income is the money you continue to make on a regular basis with little or no active involvement after the initial work or investment has been done.
It is the money earned from an investment or a business after the investment costs have been paid and the primary activity is done. For instance, a musician may continue to earn money from royalties after paying all costs of releasing his album as well as production works.
Here is another example to illustrate what residual income is. A property owner who rents out a unit of his property to a tenant and keeps receiving rental income on a monthly basis is receiving a residual income from his property after the initial purchase, setup, and development.
Now that you understand what residual income is, and you are willing to make some for yourself, let’s see some residual income ideas to build you long-term wealth and financial stability.
10 Residual Income Ideas & Strategies To Build Long-term Wealth
There are many residual income ideas and strategies to get started with. Of these, we will see 10 residual income ideas and how you can venture into them to make a sustainable living and long-term wealth.
This list will serve to open your eye to residual income ideas and not to limit you from finding out other things you can do to improve your residual income.
1. Start a Real Estate Crowdfunding
There are real estate crowdfunding platforms which allow you to invest in real estate projects and receive a share of the rental income and potential profits in the future.
For example, you can be among several different people who purchase a property or fund a real estate development project. At the end of the day, you will receive regular dividents when that project or property is put to use, sold, or leased.
Websites like Fundrise and RealCrowd can allow you to pitch in at different investments. And once your investment is received and processed, you become an equity shareholder in the real estate venture and start earning residual income on a regular basis.
As the value of the property increases over time, your divident also increase. Thus, you can continually earn a sustainable and long-term residual income from your investment.
2. Publish a Book
Publishing a book is another way you can earn residual income after making the initial efforts and investments. Just like other media, once your book has been published, you can continually earn money from the sales of the book even without further actions from you.
Publishing a book is always a smart financial move, especially if you are good at writing, storytelling, and you are able to get the right content for the book. You need to opt for a traditional publisher or self-publish it with platforms like PublishDrive, AmazonKDP, or Barnes and Noble Press.
Once your book becomes a bestseller and has gained significant popularity, you will constantly earn residual income from royalties and purchases. This is why you should consider writing about something you are passionate about or skilled at, so that your ideas will be very well appreciated and relevant to your readers, even after five to ten years from now.
3. Create an Online Course
Similar to publishing a book, you can develop an online course on a topic you are knowledgeable about and sell it on platforms like Udemy, or your own website if you have one.
Once your course has gathered enough momentum and popularity, you can keep earning from it even while you are sleeping. You can even choose to increase the price when you have gathered sufficient authority in the niche covered by your book.
4. Invest in Dividend Stocks
Stocks are another way to go when you want to earn residual income. You receive dividends for the stocks you buy from a public traded company. These companies share a percentage of their earnings with investors who buy their stocks.
Once you become a shareholder in a company, you are entitled to a certain proportion of the company’s earnings depending on the size of your shares. This is what dividend stock is about.
Public companies pay out dividents to their share or stockholders usually quarterly, sometimes bi-annually or annually, depending on when they report their earnings. And as long as you continue to hold shares in the company, you are entitled to your dividends.
Dividends can be a great source of residual income, but they are not always guaranteed. A company may cut back on dividend payouts or eliminate them, or the value of the shares may begin to fall. You can also sell your shares to make a new income if you feel the need to do so.
5. Become a Peer-to-Peer Lender
Peer-to-peer lenders provide money to borrowers as an alternative option to traditional lenders like bank and lending institutions. The borrower may need money to buy a house or start a business, and peer-to-peer loans offer the borrower the needed money at a specific interest rate.
Peer-to-peer lending platforms like Prosper, Funding Circle, or LendingClub, make the process easier with minimal effort on your part.
Once you an investor on the platform, you will get borrower requests from borrowers on the platform. Then you are either matched or requested to pay part or the full amount depending on your their algorithm or your capacity.
As the interests yields, you get a percentage of the profits generated. And you can keep earning passive income with minimal efforts after the initial investments have been made.
There may be a risk of lending money to unverified borrowers via the platforms. To prevent that, ensure that you have verified your borrowers and that you understand their risk of default (or unwillingness to pay back).
6. Become a Brand Partner or Affiliate Marketer
Affiliate marketing is another top way to earn residual income and build sustainable wealth in the long-term.
With affiliate marketing, you partner with brands to promote their products and/or services for a commission. You can do so via social media if you have a big social media presence. And when your audience purchases the product via your link or promo code, you get a commission for each sale or lead to their site.
Affiliate marketing is one sure way to earn residual income continually because you can keep earning even while you sleep. You only need to invest your time and efforts to building your online presence, and once you have a platform, you can make significant residual income from your followers when they purchase your promoted product.
7. Start a Blog or YouTube Channel
Starting a blog like Knowseeker or creating a YouTube channel is another great way to earn residual income with minimal effort even while you are sleeping. This can be done by creating valuable content, like the one you are currently reading, and as visitors digest your content, you can monetize it through advertisements, or selling digital products like ebooks.
Once your blog or YouTube channel is established with a lot of followers and daily engagements, you can earn significantly from display advertisements within your content.
Also, with an already-established platform, you can earn extra residual income through affiliate marketing (as descussed above).
8. Rent out your property
There are other ways of earning residual income from real estate aside from crowdfunding and earning dividends from your investments. You can consider renting your home or apartment or land if you are not currently using it.
Gone are the days when you need to totally evacuate an apartment before renting it out. With housing solutions like Airbnb and similar platforms, you can rent out a room in your house for some days, weeks, or months, while you occupy the other part.
To increase your residual earnings from your rented property, address any inconveniences your renters may be face living in your apartment and leave a positive impact on them while they stay in your property. This way, they can refer more people to you and you keep earning residual income as a result.
9. Start your own subscription business
Just like other means of making residual income, a subscription business requires you to put in some initial work. After that, you can earn recurring incomes on a subscription basis.
Example of subscription business include streaming services like Netflix and Spotify which charge customers on a regular basis instead of a one-time fee. But you don’t have to own Netflix to start your own subscription business.
You can sell a variety of products via a subscription box model. In this model, you can package custom products such as beauty items & makeups, clothing and shaving items and send to your list of customers on a regular basis without them going out to purchase it themselves.
You can hire a fulfullment house to package products you obtained from different vendors and send them out as subscription boxes to your customers.
You, however, need to devise strategies to get new customers, retain old ones, and build customer loyalty among them. Some companies like Cratejoy can help you handle the process of getting new customers.
10. Automatic Savings and Investment Apps
There are finance apps that can help you invest your money automatically at the end of the day. They round up your expenses and invest the spare change to fetch you residual income daily in the form of interests.
Many of these apps automatically save your money into their fixed deposit account from where they can do major investments on their own. While they make their profits with your money, you also make profits too without any significant efforts from your part outside the initial investment.
You can also get back the money you deposited after a while, at which point you may have accrued significant savings and profit.
Take home
Building residual is a great way to build your income, diversify your earnings, and build long-term wealth. After putting in the initial work to set up your residual income, it can continue to fetch you money with little or no effort.
Choose the best residual income ideas for you from the list above. Also feel free to modify any of the ideas to suit your own individual preferences. Ultimately, once it is established, you can earn additional income even while you sleep.
Building residual income takes time. You cannot venture into any of the ideas above and expect a result instantly. You need to be passionate and patient as yo invest your time, efforts, and money into your desired residual income project.
In case you might want to ask, residual or passive income is taxable and you should include it in the W-2 form if you are currently resident in the United States.
