What is Residual Income?

According to voices.yahoo.com, residual income is "Do something once and make money on it for the rest of your life."

Sometimes residual income is described as an income stream generating income 24 hours a day, 7 days a week, whether you work or not.  Most residual income streams do require work to maintain.

From voices.yahoo.com, 6 examples of residual income include:

1. Royalties from intellectual property, such as books and patents
2. Advertisements or affiliate links on your blog or website
3. Subscriptions or donations to your blog or website
4. Investments in securities such as stocks and bonds (these are actually considered "portfolio" income by the IRS)
5. Sales of online photographs or videos
6. Creation of a business and then hiring someone to run it for you

From voices.yahoo.com, 4 reasons to create a residual income are:

1. You have the potential to be financially independent. You could ditch your job if your residual income streams produce enough money. Even if you don't, you'll still be in control over how much you make (it all depends on the effort you put into it).
2. Making money shouldn't be the primary focus of life. Residual income allows you to make money while doing more important things with your time.
3. You can stop "working" altogether and still have income coming in. This is critical if you get sick or injured or have to divert all of your time to dealing with some other type of emergency. Or if you want to take an extended vacation. Or for any reason really.
4. Most residual income streams are location independent. This means it doesn't matter where you live. This fact alone gives you a huge amount of independence. You can live wherever you like and still make money.

This post was reposted from http://finlit.biz/retirement-2/the-science-of-learning-tony-robbins-10-50-90-learning-rule/, originally written on February 11th, 2013.