Residual Income and Home Based Businesses – Myth or Reality?

One of the claims you often hear when a home based business is being touted is: Residual Income. Do home based businesses actually offer residual income? And what exactly is residual income?

Put simply, residual income is money that continues to come in long after you have done whatever action needed to generate the income. In other words, you keep getting paid long after you’ve done the work.

A popular example of residual income would be authors of bestselling books. They continue to get paid income long after they’ve actually written the book – sometimes for decades afterward. In the world of home based businesses, examples might include an eBook written for sale or an article written with an affiliate link. Both of these things pay long after you’ve done the work.

A more common example for home businesses can be found in Network Marketing businesses. In network marketing, the ‘holy grail’ of customers is a customer who goes on Autoship for the product. Autoship means the customer automatically gets the product shipped to them every month. This provides the network marketer income long after he or she has made the initial sale.

But not all home based business offer residual income. In fact, most of the things commonly thought of as home based business simply trade time for money and don’t offer any residual income at all. Service based home businesses (such as bookkeeper, web designer, dog trainer, etc.) charge by the hour or by the project. Once that hour or project is fulfilled, there is usually no more pay.

Residual income is an attractive advantage to home based businesses and it’s not a myth at all. However, it’s not available in all home businesses. If residual income is something you desire in your home based business, make sure you choose one that can provide it.

Source