Residual Income Vs |Linear Income
Gone are the days of mid 50’s and 60’s when
a family could survive upon a single income. Today the inflation and economic
factors are such that survival on two incomes has become hand to mouth. Going
by this trend we can very well imagine what the future holds for us. Two
incomes certainly will not be enough. It’s best to prepare for the worst and
expect the best instead of vice versa. Its best then to have multiple incomes
flows into your finances than to have an insecure future. The concept and
importance of extra income becomes all the more apparent.
People who have been well-to-do have always
known and taken care of this. If one income dries up, one can always fall back
upon the other streams of income, and if all go well you can only get richer,
no harm in that. Ordinary and average living people have always been in a
dilemma regarding this. Loss of one income really affects them adversely and it
would take years of hard work before any normalcy returns. Not to mention, the
rippling effects of financial distress that could cause a lot of heartburn and
unwanted emotional disturbances.
Having diverse sources of income or extra
income gives you a backup to fall back upon. If one source vanishes, you should
not feel the difference. One should have enough time to reorganize and regroup,
that’s it, and you are back on the happiness highway, safe and sound. The
importance of extra income and extra sources of incomes is not lost on anyone
today, therefore the want and rush.
Extra Income can be of two kinds – Linear and Residual.
Linear income is the extra income you earn
on an hourly, daily, weekly or monthly basis. There is no more future
commitment attached to it from your end or form the receiver’s end.
Residual income is an extra income where
you work hard once and reap the fruits of it all for many years in the future.
The reward for the same effort paid over and over again.
In normal course of a career, any
individual earns a linear income through a job or a profession. You are earning
only for the time you can spare on work on a daily basis. Some earn a higher
linear income. Most smart people try to shift to residual incomes from their
linear incomes through extra income routes to have a secure retirement and
future. Starting with one residual extra income effort a year would be a good
idea.
Internet gives a lot of options in the
extra income route. One has to be careful in selecting the right one from them
by recognizing the hype form the straight talking ones.
Almost all these programmes have residual
income components in them. Select one and give it everything you can, when you
can earn the residual from it, time to start off with the next one. All the
best.
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