What is residual income and who earns it? Residual income is money is a continuous stream of money that comes from a body of work that has been completed or may need regular maintenance. It can be earned by anyone who chooses to do work that earns this type of revenue.
Royalty payments are the most recognised form of residual income earnings. Many well know personalities are extremely rich from the royalties they receive from their creations. For example, JK Rowling will earn a payment from every copy of Harry Potter that is ever sold. The payment on each sale might not be very significant but as millions of copies are sold the combined amounts make her a multimillionaire. Each book is a completed body of work but JK Rowling potentially stands to earn royalties from that finished work beyond the foreseeable future.
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.
Music producers get royalties each time the piece receives radio airplay and any time it is rerecorded by another artist. Actors receive royalties in a similar way and get paid any time their movie is broadcast for public viewing.
Perhaps a much less considered means of royalty payments is paid to inventors and patent owners. Any new invention belongs to the person who invented it and he can protect his ownership by securing the patent on it. Once that invention is used to create commercially available products the patent owner receives residual income from the sales of that product. It could even be later used as an ingredient for another product not invented by the patent owner but still warrants royalty payments. The patent on pharmaceuticals is a typical example. Royalties are still payable even after the owner is dead. The ownership of the music, person's image or patent get passed down through inheritance.
Today there are new ways to earn fantastic residual income. The evolution of the internet has led to a boom in new mega residual revenue streams for owners of websites. The owners of Google, Facebook, Amazon and eBay can be a million miles away from their computers but they will earn an income almost every time their sites get a hit. It is not just the big names that are making significant money through internet residual incomes. There are unknown webmasters, many of whom are very young or even still students that are earning good money from websites they have created that cater to a specialized niche area.
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.
Although website ownership can earn very attractive residual incomes for their owners there is an important difference between this and the royalties earned from a book or movie or a patent. Generally speaking, moneys earned as royalties are paid on work that has finished or is complete entity in its own right. However, website owners may have to continuously update their websites in order to earn a residual income. Websites have to be seen as up to date in order to attract the volumes of traffic that will make them profitable from advertising. However, maintenance of a website is comparatively little work compared to the potential income that can be earned from it.
Royalty payments are the most recognised form of residual income earnings. Many well know personalities are extremely rich from the royalties they receive from their creations. For example, JK Rowling will earn a payment from every copy of Harry Potter that is ever sold. The payment on each sale might not be very significant but as millions of copies are sold the combined amounts make her a multimillionaire. Each book is a completed body of work but JK Rowling potentially stands to earn royalties from that finished work beyond the foreseeable future.
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.
Music producers get royalties each time the piece receives radio airplay and any time it is rerecorded by another artist. Actors receive royalties in a similar way and get paid any time their movie is broadcast for public viewing.
Perhaps a much less considered means of royalty payments is paid to inventors and patent owners. Any new invention belongs to the person who invented it and he can protect his ownership by securing the patent on it. Once that invention is used to create commercially available products the patent owner receives residual income from the sales of that product. It could even be later used as an ingredient for another product not invented by the patent owner but still warrants royalty payments. The patent on pharmaceuticals is a typical example. Royalties are still payable even after the owner is dead. The ownership of the music, person's image or patent get passed down through inheritance.
Today there are new ways to earn fantastic residual income. The evolution of the internet has led to a boom in new mega residual revenue streams for owners of websites. The owners of Google, Facebook, Amazon and eBay can be a million miles away from their computers but they will earn an income almost every time their sites get a hit. It is not just the big names that are making significant money through internet residual incomes. There are unknown webmasters, many of whom are very young or even still students that are earning good money from websites they have created that cater to a specialized niche area.
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.
Although website ownership can earn very attractive residual incomes for their owners there is an important difference between this and the royalties earned from a book or movie or a patent. Generally speaking, moneys earned as royalties are paid on work that has finished or is complete entity in its own right. However, website owners may have to continuously update their websites in order to earn a residual income. Websites have to be seen as up to date in order to attract the volumes of traffic that will make them profitable from advertising. However, maintenance of a website is comparatively little work compared to the potential income that can be earned from it.
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1 comment:
Hi,
Thanks for sharing an informative post.
Here is some information on blogging for profit.
Your content must be unique,fresh and your own. This means that copying and pasting articles from other blogs and sites is a major no no. Write in your own voice-this gives authenticity to what you have to say and allows you build a loyal and trusting following.
What makes a blog successful is the ability to drive huge levels of traffic to the site.
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