Passive And Residual On-line Income, Is There A Difference?

There are so many trendy phrases on-line, as well as jargon that is too
technical for the average user, that sometimes it is hard to decipher it
all. Even with something so easy as passive income and residual income. Web
page upon web page is using the two terms interchangeably and that is wrong.
There is a slight, but significant, difference between the two.

Let us begin by going to the most basic difference, the definitions of both.

Passive Income - Income that is earned through investments, real estate or
certain internet ventures. Once the initial investment has been made
(whether it be in time or monetarily), the individual does not have to be
actively involved after that to make money. View yourself being passive and
what do you see?
Someone sitting, being lazy and inactive! That is just how passive income
works. You don't have to do anything to make the money you receive.

Residual Income - Payments made to an individual based on a specific time
table after a sale. The amount of each payment is normally a pre-agreed upon
amount. Although not an on-line example, royalties are considered to be
residual income.
Whether the person is a writer, an actor or an illustrator, these people get
paid for works that get sold and re-sold and placed into syndication.

When you look at these definitions, you can see that residual income can be
called passive income under most conditions, but the reverse is never the
case. Once you have put significant work into making the money, you are
looking at residual income that will turn passive with time.

So, when you are looking at making money on-line, there are some methods
that are 'passive' and some that are 'residual'.
Let us take a look at some from each category.

Passive Income Methods:

1. Search Engine Optimization, also known by the acronym SEO, is a passive
way to get income. When a search engine ranks you in the top 10, you will
get targeted Internet traffic to your site. Whether you are selling
products, a service, or just information, you can get passive income just by
getting those people to your site once it has been created.

2. Pay Per Click advertising, or PPC advertising, is a passive way to get
income. Although you must invest in the advertising, these targeted ads draw
business to your site. Once that has been set up with a PPC advertising
service, no time or effort is required on your part.

Once these methods of making money are in place, you sit back and have no
further investment of time or money ahead of you.
You simply enjoy the income.

Residual Income Methods:

1. Selling anything on-line, whether it is a good or service, where the fee
is automatically renewed every so often is a residual way to make income.

2. Network marketing which requires you to go out and get customers or find
representatives to get customers, from which you earn commissions every
month is a residual way to make income.

Affiliate programs fall somewhere between the two. Sometimes they will take
very little effort on your part, even from the start, so can be considered
passive. However, there are times when a great amount of effort is put forth
on your part and payments will be made in such a way that they would be
considered residual.

No matter which road you choose, both passive and residual income are great
ways to supplement your income or raise the level of your lifestyle. With
research, practice, and a little bit of good luck, you can make a good
amount of money with either.

About The Author: Kristy Taylor is a syndicated freelance journalist with
articles and short fiction strewn across all forms of media. Join her plus
1000's of real people worldwide who are building their own 'Income for Life'
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