You’ve probably heard the saying “The rich get richer while the poor get poorer”. This is not necessarily unfair, as those getting richer are doing so by focusing on more than just active income. They are getting richer by using residual income to supplement that which they make actively.
Now, to understand what residual income is a little better, you need to better understand active income. This is the income we are paid for the amount of time we put in working. Wages and salaries are the rewards for working hard at your job and is also limited by the amount that you work. You don’t get paid if you don’t show up and put in the effort.
What Is Residual Income?
On the other hand, though, is residual income. This is the income that you get paid after the work is done. Royalties from books, movies, songs and other works of art. Income from real estate such as rentals or sales, business investments that you don’t have to be actively involved in to reap the benefits from. (A good example is Bill Gates, who no longer works at Microsoft, but still gets an income from it.) Once you build an asset, you can continue getting money from it, and this is a passive or residual income.
Getting to the point of having a residual income tends to take a lot of work and even more time. Writing a book, setting up a rental property, or starting up a business is not an easy task and many won’t ever get to the point where they’re able to do so. However, if you are in the position to create a way to earn residual income, then you’re in a position to earn more and relax while doing so.
IRS CRM allows you to be able to calculate all of your residual income within its software. Not only that, but IRS CRM will help you find just what to pay your representatives and how to manage other finances of your business. If you have any other questions, feel free to contact us, as we’d love to help you out.
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