Residual income is an ongoing stream of financial returns paid to the producers, creators or owners of a specific entity of work. Earnings are generally related to ongoing sales or usage of that entity by the public. Anyone can earn a residual income but the value of the revenue stream depends on how successful your product is.
Most of us are familiar with the concept of royalties as a type of residual income. Authors are perhaps most known for receiving royalties on their work. Generally, they are paid by the publisher an advance fee and then they get continuous payments of royalties which might correspond to a small percentage of the price each book is sold for.
In the same way, musicians earn royalties from the music they create. Every time a piece of music is sold it earns royalties and every time it is played on the radio or used for any other commercial purpose, the creators will be paid.
Elvis as an actor earns a royalty payment each time one of his movies is rerun on cable television. Elvis the icon continues to earn residual income for the use of his image or name for memorabilia or branding purposes. Elvis is dead but his residual income is continually paid to the owners of his estate.
Another form of residual income is earned by patent owners. An inventor may create a new invention and registers ownership of the invention by securing a patent on it. Every time the patent is used in any product that is marketed and sold the inventor is paid royalties. Royalties paid for books, music, film and patents can continue to be paid long after the owner is dead. Whoever inherits the royalty ownership will carry on receiving payments. Clearly, substantial amounts of money can be earned from royalty payments but not all residual income is earned by rich and famous celebrities and their families.
The new information age has brought a whole new class of residual income earners. The most momentous and prolific in growth is money earned from website ownership. It is possible for anyone to earn money this way. Many website owners continue to earn revenue from their sites when they are far away from their computers for long periods of time.
The way to earn money from a website is through advertising. There are many advertising streams that a website owner may choose from. One of the most used is Google Adsense. Anyone who frequents the internet will be familiar with this type of advertising. They are the blocks or columns of text ads by Google that appear on millions of websites. Every time a visitor clicks on one of these ads the site owner will earn a small payment. This can translate to hundreds of dollars a week for some of the best performing sites.
The key to earning a decent residual income from your website is to keep it up to date and attracting the maximum amount of traffic. This means that your site will need ongoing maintenance. However, if you are able to create a popular website, the work you will have to do will be marginal compared to the amount of money you will be earning.
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