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What is Residual Income? 10 Residual Income Ideas to Build Your Wealth

Most people believe that money is created through active income. They rarely think about passive income or even residual income as a source to generate wealth or financial freedom.

Residual income is an income that can be passive. The calculation determines how much profit or excess income is available after all expenses are paid off.

What is Residual Income?

Residual income and passive income seem to be used interchangeably within the internet world. The money that comes from all that work is passive income.

Residual Income vs. Passive Income

When talking about residual income, we come across two different types. There are personal and corporate.

Different Types of Residual Income

In personal finance, residual income is the disposable income. You can calculate your residual income every month by taking what is left over after paying all debts.

Personal Residual Income

Corporate residual income is a bit different from personal. Corporations use residual income to assess their performance. That is the profit after paying all costs they have incurred to generate revenues.

Corporate Residual Income

1. Invest in Real Estate

10 Ways to Create Residual Income

Owning real estate can be a great way to generate monthly income. You can purchase a single-family home, duplex, or even apartment building. The great thing about owning real estate is that there will be a good cash flow coming in every month.

2. Vacation Rentals or Short-term rentals

If you have a free room in your house, you can rent that out. It is an excellent opportunity to make extra money without having much work to put in it.

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