Residual Income; Building Rigid Aim & Objectives.
Earning Slowly Consistently
I was speaking to a friend about the prospects of owning a rentable property in an area where the cost of living is on the high side, Competition for lent or lease is very good but at the same time, the land would be cheap especially for a buyer who is intending to build.
He negated this idea because he didn't believe in the proposition of residual Income overtime. The truth is that, I didn't know his source of income, but he was certainty an active earner, he earns his income by contract after completing a specific task for a certain period of time. As a result of this, he was used to the timing of money.
There was a Specification to how he earned, he measured his ability to earn by time and season, upon an agreed contract making it rather difficult to tell or convince him about earning slowly overtime. Residual Income is the money you earn overtime after spending on a prospect.
Active & Residual Income
Active income on the other hand is earning on a contract or a specific timing. Many people are more of active earners, because they're always waiting for a specific period of time when they're going to be paid in order to take care of their expenses and expenditures.
The truth is, an active earner can begin to earn residually, especially if they have saved aggressively enough to the extent that they have enough left to take care of their discretionary needs. Most active earners I've known are paid in a way that even if their salaries are being increased let's say twice in 3 years, there's always the effect of Inflation affecting how much they can earn and also the rise in need, especially when they choose to take on more monetary responsibilities like getting married.
From One Earner To Another
However, we have active earner who are wealthy, their take-home for a specific period of time somehow takes care of them, and they have enough to save in the bank, however saving in the bank wouldn't help them earn residual Incomes.
Active earners can become passive and residual earners, for example, an active earner might decide to invest in rentage properties which can come in form of equipments and after spending some amount of money for these equipments, he begins to earn residually and passively to some extent, this is evident in how people invest in lands and DEC as well as SPS on splinterland.
The only difference is that the former is real-time and the latter is on a blockchain. Of course, the major way to earn residually is to originally have a capital or earn actively well. Residual Incomes involves calculating expenditures, expenses and cost required to set up a venture, we wouldn't really say this is a capital since It's not a full-blown business venture, and it's only an opportunity to help you build an additional stream of income.
The Aim Of Residual Income
The friend I was talking to, saw no reason to earn residually. Owning a house or a home brings so many advantages, first the prospect or having the land on which the house is built appreciates, if the land is big, you can rent or lease some portion of the land to small business owners.
Overtime, you're not aiming at recovering the amount of money you use to purchase and build the property. Your aim is to have it as a stream of Income where you can activate the little profit it brings to either owning more Opportunities to earn passively or even taking care of real-time needs and want.
However, some people feel that earning residually can take a lot of time and they have a limited period. Some others feel that earning residually doesn't make enough financial impact, but the truth is, having multiple means to earn residually is what guarantees finance freedom overtime.
The Need In A Time Of Retirement
Plus, active income isn't guaranteed overtime, and this is why it's necessary to see the need to earn residual Incomes. It involves creating the right concept that will eventually allow one to earn passively. The choice to own a house might not be an instantaneous hit.
But the idea is to concentrate on the features or opportunities that are unlocked with that land in other to earn. Someone with a capital cannot of course chose to buy a land as a business idea, unless they are aiming it to be an important form of equity.
A land can unlock residual income but not totally active income, unless it is situated in a place where the more the value goes up, the demand for it also keeps increasing. In earnest, think residual income, the future might be uncertain, but learn to prepare financially for it, and start early to build multiple streams overtime.
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My name is @Josediccus, a young Nigerian entrepreneur who is a Vlogger, A Psychologist, Poet, Sports Writer/Analyst & Personal Finance Coach. I'm using my contents as a process to create shared meaning as well as create expressions through which people on/off hive can relate. I believe content is a process to be enjoyed and relished and I'm up for any collaborations in my field stated above. Cheers
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Hi @josediccus
I don't like keeping money in the bank, I prefer investing the money so it makes me more overtime, the goal is to become a passive earner. Nice post I enjoyed reading it and also learnt something new, thanks for sharing 👍🏼. HAPPY POWER UP DAY.
Most of us here have actually learned this too, its why I love leofinance by all means. Before, in the past, I use to think saving in the bank was the best. Thanks for dropping by.
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Me too, then I started noticing unnecessary charge's, the value of my money kept on reducing as dollar price increases, my money just there in the bank doing for me but helping the bank.
It is sensible to build some form of passive income streams.
In times of sickness or other things that come in the way of active earnings these helps.
I find this such a blessing , our apartment brings us a steady income each month and this goes toward our son's university fee and such.
We really need to focus on passive income earning streams.
That is a lovely example of earning residually, it means you didn't have to wealthy, but having a stream of income that can enable you take care of some needs is Important. The truth is, even when you don't work, you'll still manage to be comfortable.
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An awesome read
Sometimes I need to stand up while reading your post, because it just give this enlightenment and has this kind of call to action.
@josediccus
I have also found it true to push hard to earn residually, however could you please suggest other means of doing this asides purchasing a land.
Thank you, in life whatsoever its Important to define some of these things, they're Important to one's personal finance. Being wealthy is not everything. Being comfortable is attainable with the right plans in place.
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Hmm .
I get that..
Being wealthy may not always mean being comfortable.
In fact, The true definition of wealthy must include the ability to make and remake wealth consistently and be at peace with it.
The reality that salary earner are more dependent on Govt or Bosses for stipends, which won't last the first 2 weeks of the said month is really a bitter truth.
I particular started my crypto journey when I saw this ahead. I must say I need guidance on Leofinance and how to sustain a passive residual income through it.
A friend of mine is on Hive, I actually got her in back from Steem. I admire so much because she isn't really capable of handling her account posting-wise, all she does is Actifit and she joined me on Splinter last year too.
The good news is even her Splinterlands asset is currently worth more than mine and all she does is push her nephew who is still in school to post her Actifit report and play her Splinterlands.
We had a chat this week and she told me she put R10 000 in a bank for 5 years and the return will be be R15 000 (5 years)
And for a year with $10 investment in Splinterlands she's got $4800
She's been full of stress and anger towards the banks since 😃😃
It boils down to how and where we put our finances to use.
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Holly molly. Wow, hahahaha $4800? Thats a lot of money if you ask me and in just over a year too. It's evident how passive and residual income is the way to go, I meant its totally obvious Why she should be angry. In Nigeria, the returns will be way worse, however saving in banks in general isn't that profitable, its daylight robbery if you ask me.
Im happy for her really, what more do we need to prove, to be global, I mean hive and it's ecosystem.
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You hit on point. Truly, I really liked your write-up. In this generation, having only one source of income puts quite a load on families which are quite big; 5 members or more. A source of income is quite necessary and it is also wise to make the source diverse than to stick with one only. Well written.
I also agree that active income sources are not guaranteed to stay there over there. As technology and the situation changes, jobs will come and go. It's why I like to pursue some sources of passive income. It will always work for you and if you can get it big enough then you will never have to worry about your active income source in the future
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This is a very enlightening post. The search for sources of residual income made me jump on this hive opportunity when @bhoa made a post about it. I am still on the lookout for more, both real-time and Blockchain esp real-time.