What are differences between passive and residual income? There are multiple ways of defining both, but generally passive income is income that comes in without you putting in time or effort after the initial setup. Residual income is a recurring form of passive income, that occurs over time from work that you only did once. Perhaps some real-life examples would help clarify the ideas?

Passive Income Examples

There is one form of passive passive income you are probably familiar with - the interest accrued by a savings account or bond. Another would be the money you collect from renting out real estate. However, we are assuming that if you are reading this webpage, you are interested in ways of creating passive income that do not require a great amount of up-front money, thus our focus towards online passive income.

Gaining passive income online usually involve creating and selling digital products such as ebooks, mp3 downloads or videos. It can also include, putting advertising, such as google adsense, on a website and getting money from the clicks generated.

Residual Income Examples

If you write a book and get royalties, those royalties are a type of residual income. Creating a membership or subscription-based website that yields monthly fees is also considered residualincome. So would selling someone else’s services or products and getting a monthly affiliate fee. For instance, we have had many people sign up for services such as ejunkie and constant contact through our affiliate links. The person pays the service monthly and we get a cut of the payments every month - resiudual income.

As we stated earlier, from our standpoint the critical distinction for both types of income is the “recurring” part. Whether you define the income as passive or residual is less important than how often you get it, how much you get, and how many different sources or streams of passive income that you can create. In the beginning stages of developing your passive income streams, you will need to decide what the best passive income opportunities are best for you and your unique goals and dreams