What is residual income? A residual income is income that you continue to receive without any ongoing work, sometimes called “passive income.”
You can usually earn residual income in a variety of ways. You can see a few people selling products and services while other lend or invest money. A few examples include royalties, rental/real estate income, interest and dividend income, and income from the on going sales of consumer goods (like music or books).
But if you’re looking for the best way to earn residual income, you need to consider:
- How much of an initial investment you can make
- How long you’re willing to wait for returns
If you’re interested on making money without working everyday then continue reading below to find out!
See our best bank bonuses updated daily to earn up to $1,000 in free money. Find popular checking offers such as Chase Bank, HSBC Bank, TD Bank, Huntington Bank, BBVA, Discover Bank, and CIT Bank. See our best rates for Savings and CD too.
|Chase Business Complete BankingSM $300 Bonus||Chase Total Checking® $200 Bonus|
|HSBC Premier Checking $450 Bonus||HSBC Premier Checking Up To $600|
|HSBC Advance Checking $200 Bonus||HSBC Advance Checking Up To $240|
|TD Bank Beyond Checking $300 Bonus||TD Bank Convenience Checking $150 Bonus|
|Huntington 25 Checking $500 Bonus||Huntington Business Checking 100 $200 Bonus|
|Huntington Unlimited Business Checking $400 Bonus||Huntington Unlimited Plus Business Checking $750 Bonus|
|Axos Basic Business Checking $100 Bonus||Aspiration Spend & Save Account $100 Bonus|
|Ally Invest Up To $3,500 Bonus||Wise Business Banking $100 Bonus|
|WeBull 4 Free Stocks|
Table of Contents
- 1 Residual vs. Passive Income
- 2 Work Required: Less
- 3 High-Yield Savings Accounts
- 4 Credit Card Rewards
- 5 Invest in Stocks
- 6 Lend Your Money
- 7 Get Paid For What You Already Do
- 8 Work Required: Some Work
- 9 Host Vacation Rentals
- 10 Open an Online Store
- 11 Work Required: The Most
- 12 Become a Landlord
- 13 Create Content
- 14 Bottom Line
Residual vs. Passive Income
So what is the difference between residual and passive income? In the finance world, residual income is the money that a person has left over after their expenses are covered each month.
While a Passive income still has the same definition in a financial environment that it does in an online business environment.
In this post, we will be using both terms to talk about income that is earned with little to no ongoing work.
Work Required: Less
We’ve listed a few residual income ideas below so you can start your journey. Make sure you do your research, so you can get the best method for you. Here are a few methods that requires less work:
High-Yield Savings Accounts
Most high-yield savings accounts at traditional banks offer less than 0.10% interest. However, online savings accounts offer higher interested rates that generates 20 times more accumulated interest per year.
Even though interest is earned in small amounts, it requires no effort to let your money sit in a savings account. This is considered a true passive income.
Credit Card Rewards
Nowadays, credit cared companies offer cash back and rewards for all of your everyday purchases. With this you can earn money on each purchase and create a small residual income stream.
You can take advantage of the perks included with credit card you chose and see what else they have to offer.
To get started you can check out the following options below to start earning cashback:
The Chase Freedom Unlimited® Card offers a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening. Earn unlimited 1.5% cash back on all purchases.
In addition, you can earn:
• 5% on travel purchased through Chase,
• 3% on dining at restaurants and drugstores, and
• Unlimited 1.5% cash back on all other purchases.
There is no minimum to redeem for cash back & your cash back rewards do not expire as long as your account is open.
This card comes with no annual fee and you'll get a free credit score that is updated weekly with Credit JourneySM.
The Citi® Double Cash Card offers you the chance to earn cash back twice. Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time.
Balance Transfer Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will apply based on your creditworthiness. Balance Transfers do not earn cash back.
This card comes with no annual fee.
Invest in Real Estate
With real estate investing, this is is a great way to generate residual income to diversify your personal finance strategy.
You can earn residual income in many ways with real estate crowdfunding. Companies will pay automatic quarterly dividends while other spread out income as the property collects rent. So make sure you do you research when you’re choosing a real estate investing platform.
You’ll see some real estate crowdfunding programs only work for investors who are accredited by the Securities and Exchange Commission. So a minimum net worth of $1 million or are making at least $200,000 per year for the last two years.
Invest in REITS
Real Estate Investment Trusts (REITs) offers a turnaround on your real estate investments. REITs are similar to exchange-traded funds (ETFs) since they both have a variety of investments within a set portfolio.
But ETFs trade in stocks and bonds, whereas REITs invest in commercial real estate.
Invest in Stocks
When you invest in stocks, depending on when you choose to cash out your stocks, you can generate residual income for long-term and immediate use.
You can choose from three ways to invest in the stock market:
- Using a robo-advisor
- Investing on your own
- Using a broker
Use a Robo Advisor
Robo-advisors are online tools programmed with algorithms to build the right portfolio for your profile. They are a good option for inexperienced and hands-off investors.
They help by deciding your risk tolerance level based on your age and long-term goals. The algorithm then creates a personal portfolio of investments and invests your money.
So once your money is invested, the rob- advisors automatically rebalance portfolios and reinvest profits.
Invest on Your Own
If interested, you can also check out free trading apps. With this you can choose your own individual investments and build a portfolio, but this requires time and research since this has more involvement than using a robo-investor.
Most free services are basic, so your fees are going to be low, so if you’re a new investor you can take advantage of their user friendly features. However, if you’re an experienced investors you might find that most free apps are too basic.
Use a Broker
So if you’re more of an experienced investor who’s looking for more independence as well as advanced tools, you should check out online brokerage services.
Note that brokers charge a per-trade fee and sometimes a percentage of each trade. Those fees usually help the platforms offer market research that way traders can make better decisions.
Even though the brokerages are primarily online, some also offer the ability to trade through a human broker with an additional fee.
Lend Your Money
Investors can buy shares of a loan using peer-to-peer lending. So when borrowers pay those loans back, usually on a monthly basis, investors can earn a passive income form the repayments.
Most peer-to-peer lending programs allow investors to choose the loans they finance based on the predicted risk of result. So loans with a higher risk level provide higher returns.
Please note that no matter the associated risk level of a loan, there’s always a chance you’ll lose your money.
Get Paid For What You Already Do
You can easily get paid for just doing the things you already do or can do while you perform other daily obligations, such as surfing the web, taking surveys, or buying groceries. You can get paid in gift cards, credits, or even plain cash.
Although this is easy, this might not be the best source for residual income since the returns are low for the time you are putting into it.
Work Required: Some Work
The methods we’ve listed below requires a bit more commitment or monetary investment, but they will offer you a consistent residual income.
Host Vacation Rentals
You can try renting our a spare room or guesthouse to travelers, this is an easy way to create a steady stream of passive income.
Before you start hosting make sure that you:
- Get permission from your landlord and your city. But you may have to buy extra vacation rental insurance or pay more to your landlord.
- Choose a website to host your space. Make sure you research all the websites and the fees before listing your space.
- List you space online. When you list your space item, make sure that you take clear photos and describe your space that would travelers book it.
Open an Online Store
You can also try to open your own online store. If you have your own or make your own designs, it can be printed on merchandise and be purchased by shoppers online. And if your designs are popular, you can generate a stream of passive income.
Sell at an Online Marketplace
If you’re a new seller who have no or little online following, you can try using a platform with its own traffic. The only downside to this is the competition because there are a lot of merchants that in any given marketplace.
Not only that, there are more costs involved. New sellers may have to pay to list individual products and monthly fees equal to percentages of their total sales.
Please keep in mind that to only sell your own work. A lawsuit can cost much more than any residual income you may earn.
Sell Through Your Own Website
If you have a large online following, you may have a built in buyer base. But make sure you know that the residual income you earn will be related to how much work you’re willing to put into maintaining your brand and website.
Services that charge a percentage of total profits may seem cheaper than those with a flat monthly rate, but the fees can add up. Make sure you take stock of your costs every month!
Work Required: The Most
In order to establish a residual income, you need to put in a decent amount of work most common ways to have a steady stream of money.
Become a Landlord
Owning a property may give you a secure residual income, but keeping reliable tenants can be difficult. As a landlord, you are responsible for purchasing and renting out property, maintenance and any other issues that might occur.
Make sure you weight these factors in to decide if this is the best way for you to earn residual income.
Most online content have a potential to earn passive income even when an audience can access it for free.
Publish an E-Book
When you publish an Ebook, you can explore a variety of topics from your own stories to “How-to guides, depending on your strongest suite.
Once your book is written and a cover is designed, just publish online just by sharing. However, selling a successful e-book come to making it known. Use your personal or brand social media channels, a business partnership, or other means.
Create an Online Course
You can also create an online course and build residual income. You can create a number of written materials and videos to help students learn the subject that you’re teaching. You’ll be able to build a passive income as students purchase it.
But if you choose to create a course in a constantly changing subject, you’ll need to add new information to keep it current.
Become a Blogger or Youtuber
Before you start uploading videos, keep in mind that videos and blog posts can only build a somewhat steady residual income after they reach a certain amount of views. So you’ll need to find and build your audience if you want to go this route.
To create a successful blog/video, you’ll need to look for a topic your comfortable doing that has a high demand for more content.
Build an App
If you can create a way to help or improve people’s lives or make everyday tasks easier, you can make it into an app and generate income.
The most important part of app creation is marketing the product. In order to generate a residual income, you’ll need to have a significant number of app subscriptions.
To summarize, it all depends on your interests, skills, and business knowledge, you can create sources of residual income that align with your experience. Residual income gives you more financial stability, flexibility with your lifestyle, additional retirement savings, and a more robust financial standing.
|Chase Business Complete BankingSM||$300 Cash||Review|
|Chase Total Checking®||$200 Cash||Review|
|HSBC Premier Checking Member FDIC||$450 Cash||Review|
|HSBC Premier Checking Member FDIC||Up To $600||Review|
|HSBC Advance Checking Member FDIC||$200 Cash||Review|
|HSBC Advance Checking Member FDIC||Up To $240||Review|
|Huntington 25 Checking||$500 Cash||Review|
|TD Bank Beyond Checking||$300 Cash||Review|
|TD Bank Convenience CheckingSM||$150 Cash||Review|
|Huntington Bank Unlimited Plus Business Checking||$750 Cash||Review|
|Huntington Bank Unlimited Business Checking||$400 Cash||Review|
|Huntington Bank Business Checking 100||$200 Cash||Review|
|Wise Business Banking||$100 Cash||Review|
|Axos Bank Basic Business Checking||$100 Cash||Review|
|Aspiration Spend & Save Account||$100 Cash||Review|
|American Express High Yield Savings||0.50% APY||Review|
|CIT Bank Money Market||0.50% APY||Review|
|Ally Invest||Up to $3,500 Cash||Review|