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Internet Marketing > Weekly
Tips > SSWT 2/23/05
Passive Income vs. Residual Income
Often
we come across terms in regards to doing business online that
we are not 100% familiar with. Sometimes even several terms that
are mistakenly interchanged to the point that the true meaning
of each gets lost altogether.
According
to a recent survey, two such terms are "passive income"
and "residual income". Both are often associated with
Network Marketing opportunities... but today we're going to explore
their true meaning, as well as other online opportunities to earn
one or both types of income.
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-
Residual Income
Recurring
payments that you receive long after the initial sale is made,
usually in specific amounts and at regular intervals.
- Passive Income
"Income
derived from business investments in which the individual is not
actively involved"
Passive
basically means "inactive" or "submissive",
so Passive Income could be viewed as money that you make that
doesn't require an effort from you.
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From those definitions, it's obvious that Residual Income is also
considered Passive Income. Once you make the initial sale, your
residual income can be considered passive. In most cases, you
do not have to "work", or make additional sales, in
order to continue to reap the profits.
Examples of residual income options might include:
-
Network Marketing, where you enroll customers or recruit representatives
that you earn a monthly commission from.
-
Affiliate
programs for recurring payment type services or products, such
as: hosting, membership sites, dating sites, etc. In these programs,
you are paid a commission each time the recurring payment is
billed to the customer you referred.
-
Selling
anything that is automatically renewable, or consumables where
the re-ordering is automated.
There
are also OTHER ways to earn Passive Income, outside of these traditional
'Residual Income' options. Again, a great definition of Passive
Income is:
"Income
derived from business investments in which
the individual is not actively involved"
Let's take a look at some examples of PASSIVE
Income:
-
SEO, or Search Engine Optimization, where you obtain top 10
search engine rankings for specific keyword terms in order to
attract highly targ.eted traffic to your products, services
or information. Using this method you set up the web page or
site, obtain the rankings, and then you are able to make sales
and earn profits "passively" from that point forward.
Instead of being out "making the sale", the search
engines are making those sales for you - day and night.
-
PPC,
or Pay-per-Click, is another form of search engine marketing.
While 'SEO' is free, it can take time and work to obtain good
listings in the major search engines. PPC allows you to begin
advertising across the major search engines very quickly, without
a large investment. You simply pay a set amount (determined
by your own bidding & daily minimums) for each click-through
to your site. You can set up Pay-per-Click Advertising and begin
driving targ.eted traffic to your web pages, again allowing
the search engines and web pages to "work" for you...
even while you are away.
-
Multi-Tier
Affiliate Programs. Simply put, these programs allow you to
recruit other affiliates and earn commission on each of the
sales that they make. Instead of actively making the sales yourself,
signing up several good sub-affiliates would allow you to turn
a very nice profit on *their* work.
-
Product
Development is another great way to create a stream of Passive
Income. Ideally you want to create a product that can be sold
through an automated system, and requires very little customer
service or ongoing support. Examples may include: writing a
book or ebook, creating a course, developing your own CD/DVD/Video
sets, creating a software program, etc.
-
Setting
up your own Affiliate Program. If you offer a product or service,
you can put a sales team to work for you by offering them a
commission structure. The beauty of this model is that you do
not have to pay your sales force unless they make a sale for
you - at which time you give them a percentage of the sale made,
or a set fee for the referral. With digital products, or automated
systems, this sales team could easily generate the majority
of your inc0me with very little work required on your end.
Obviously
all of these options require an investment of time (and perhaps
money) on your part in the beginning. The goal is to choose a
business model, or even several that can work together seamlessly,
and "get the ball rolling".
Once
you set things up, very little maintenance is required for you
to continue earning a Passive Income well into the future.
In next week's issue we'll take a more in-depth look at these
Passive and Residual Income options, and how you can easily capitalize
on one or more of them yourself.
I'll
share with you a detailed example which includes many of these
options together in a low-maintenance high-profit business model
that almost anyone can do ;)
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Passive Income Guide Details -
Sign
up here to learn more: http://www.PassiveIncomeGuide.com
You are under no 0bligation whatsoever, and it doesn't cost a dime
to get more information... so head on over and be sure to get yourself
on the notification list. Those that do will receive a complimentary
chapter of the Passive Income Guide as soon as it is available ;)
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Enjoy & Have a Super-Profitable Week!!
Lynn Terry, Site Admin
Lynn@SelfStartersWeeklyTips.com
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