Online Residual Income - Why You Need Passive Income

A simple definition of online residual income (also known as passive income) is payment for work that is done once and continues to pay - it is any payment system where you receive regular, ongoing payments as a result of a single sale.The payments can come weekly, monthly, quarterly etc. depending on how the company's affiliate pay schedule has been set up. They are, however, regular and ongoing with no further selling activity once the initial sale has been made.Some examples of online residual income sources are as follows:Web hosting that is paid monthly
E-book re-seller (affiliate)
Learning Centers - on going education
Auto-responder suppliers (monthly rental).
Any software which is supplied based on a rental basis.
Mailing lists (monthly rental)This list could go on and on. Musicians' income received for music produced long ago, is an example of this passive income. Any online product or service which is provided on a fee for service basis has the potential to provide you with o monthly check. The passive/residual income concept hinges on the customer automatically renewing each week/month without any requirement for action by you or the customer.Other areas that have possibilities for producing this easy money are disposable or consumable products with an auto-ship agreement. Examples: vitamins, cleaning products, cosmetics. For true residual income, the reorder process must be automatic as described above - automatic and no further action needed. It is automatic and involves no extra effort because the service or product is needed to run your business therefore your downline will subscribe just as you did. Just makes sense to incorporate these additional revenue sources why not include that income in the overall compensation plan for your online business?If you are setting up your home business with the thought that eventually your online income will replace your salary, this source of extra money will certainly help attain that goal faster. You can count on the arrival of the checks and know ahead of time the amount. The amount will grow as the number of down line members increases It is quite addictive and you will look forward to receiving this passive income for work you accomplished long ago.Online residual income depends on the reorder agreement by the client or customer (your recruit). With an automated reorder system, your customer needs to take time and make the effort not to reorder the product or service. Until he or she opts out of the service, your earnings will be automatically processed and sent to you. You will want to focus on marketing and recruiting for your on line business to increase the number of members enrolled which in turn automatically enlarges your online residual income.There seems to be something psychological about keeping and not ending a subscription to a service or auto-ship long after it is needed...loyalty maybe, or just procrastination. What ever the reason, it works for the residual income earner. The beauty of affiliate programs which are the source of online passive earnings, there is almost no end to the number of related affiliate programs that can be incorporated into the compensation plan. Joining is optional but greatly increases the chances for more and bigger monthly earnings. In summary, if you are starting an online home business, consider the real advantages of choosing a business system that incorporates residual income into it's compensation plan. This will multiply your income for the same amount of time and effort.