Residual income is income everyone dreams about - recurring income that continues to be paid to you long after your efforts have ended.

It is much different that employment income, where you are paid for a unit of effort. Residual income is different in that it can pay much more than the value of the initial effort, and free up your time so that you can begin to work on additional sources of residual income. That's what is called multiple streams of income.

Residual income can be created in many different ways.

Here are the most popular methods:

Create a product, and sell it over and over, ideally by using an automated system.

Affiliate program. Usually, for this to be considered residual income, the affiliate program should be selling something that renews, like a subscription or consumable product (so that a single customer can produce an ongoing stream of income for you). Affiliate programs are also called associate programs, or agent agreements.

Create copyright material. This is usually music or writing, and you get residual income in the form of commissions for every unit that is sold.

Compensation models. Some methods of employment do not include an hourly wage. The employer in this case usually works out an arrangement where a share of the profits will be paid to you in exchange for the work you do. This is common in commercial websites where a revenue stream is created - the web developer may be paid a percentage of ongoing revenues rather than paid up front.

Revenue creating assets. Some assets like real estate can produce residual income, by creating situations where rental income is produced. Residual income in real estate can also come from the assignment of property rights, like when oil is discovered and you assign drilling rights to a company in exchange for a percentage of revenues.

Network marketing. Companies that pay you to sell products and recruit others to sell are called network marketing or multi-level marketing companies. In network marketing, the effort is in building a group of others that also sell the product (called a downline), and then receiving residual income based on the sales of everyone in your downline. It is one of the more popular ways to earn residual income, but also one of the riskiest methods, due to problems like poor business plans, non-compliance, and management corruption.

Investments can also be considered residual income when those investments pay recurring income, like an income fund.

Residual income can be a gold mine for you, if you know how to secure a consistent ongoing income stream. While some methods require skills or creativity, other sources of residual income require only knowledge of the opportunity, and by taking advantage of those opportunities, residual income can be created.

Once a residual income source begins to pay, it can become extremely rewarding. Many people who receive residual income begin to actively seek out other methods to receive additional residual income.

Residual income is one of the best ways to achieve time freedom and enjoy the important things in life.