Residual Income – A Stay At Home Moms Best Friend
|October 28, 2009||Posted by Business4Moms under General Information||
What is Residual Income?
For the purposes of a stay at home mom, residual income is income that continues to flow in even after the initial act that produces the sale is over. For example, imagine making a sale of a handbag. The initial purchase of the handbag is the initial act that produces the sale or income. However, if the person who purchased your handbag paid you a fee each month in order to be able to continue to carry the handbag – that would be residual income. You didn’t have to do anything else, you didn’t have to make another handbag, you didn’t have to sell another handbag, the money simply continues to come in. That is the beauty of residual income.
Why Residual Income is Great for Stay At Home Moms
The reason residual income is so great for stay at home moms, besides the fact of getting paid without having to do the work again (I’ mean who can argue with that?) is that residual income frees up more of your time to spend with your kids, and in reality, that should be the reason you want to work from home. Not that the whole “never have to wear pantyhose again” thing isn’t motivating, but really, it’s all about the kids here.
Real Life Residual Income Ideas for Stay At Home Moms
While the handbag example is clear, it really won’t happen much in real life. So what are some real examples of residual income?
Many multi-level marketing plans have residual income. Most MLM’s have a minimum monthly purchase or sales commitment for their associates, this means that once someone has decided to join the company as a customer or associate, that each month you will be paid a commission on their purchase, you don’t have to go out each month to get an order from them (although regular contact with your customers/associates is definately a good thing.) Also, the insurance industry is a good example of residual income. Once a person purchases the insurance policy, the agent receives income every month that the person pays their premiums.
Other residual income ideas besides MLM would be:
- Service agreements for web services (you design their website, and then for a monthly fee, you agree to check and update the website up to a certain number of changes.)
- Whatever of the month clubs – if you make soap or other products, a residual idea would be to create a “soap of the month” club where if your customers agree to automatically purchase a new soap each month (usually at a small discount) then you don’t have to attempt to make new sales each month, simply send them their monthly product and collect their payment accordingly. (More closely related to passive income than residual since you still have to create the new product – more on passive income later)
- Writing books or e-books – the residual effect of the book is that once you do the activity (write the book), then everytime one of your books sell, you receive income from that sale.
The beauty of residual income is it helps to multiply your efforts. Let’s say you need 10 buying customers to cover your expenses. With residual income the first month you go out and find 10 customers. The next month, you go out and find 10 more customers, plus the first 10 customers are still purchasing from you through the residual method, so you now have 20 customers. So for the same amount of effort you now have 20 customers. WIthout residual income, you would have to do twice as much work for 20 customers as you would for 10 customers.
Residual income will help you to limit the time you spend on your business without limiting your income. There are ways to generate residual income with just about any home business or industry, just start thinking about ways to add value to the product or service you already provide!
Need help? Just ask!