How to Build Residual Cash

Treasury bills are guaranteed by the U.S. government.

Residual cash is money that you earn over several months or years for work or research that you did only one time. You can earn residual income, also known as passive income, in many ways. Combine several income streams to build your residual cash flow. Use your job or hobby skills and experience to start your own venture. Invest in companies that have a history of paying regular dividends. Some passive income is guaranteed, such as dividend payments on government bonds, while other methods of building residual cash depend on actual sales.

Instructions

Start Your Own Business

1. Choose a specific niche that solves a problem or meets a need. For example, within the general topic of dog training are the specific niches of problem barking, chewing, jumping fences and aggressive behavior.

2. Sell affiliate products that solve the problem. Compare the affiliate products with the leading competitors' products, to make sure they have similar or superior features and competitive pricing.

3. Research the reputation of the affiliate programs. Check the Better Business Bureau website as well as online reviews from people who have bought or sold the products. If past or present affiliates have problems with timely payment, then you may want to avoid those particular companies. Additionally, if customers refer to the product as a piece of junk, then do not associate your name with it.

4. Apply to the affiliate programs that fit your interests and meet your customers' needs. You earn a commission with each sale.

5. Buy a domain name and arrange for Web hosting.

6. Set up a mini-website that promotes the affiliate products. You may opt to start many mini-websites for different niches. Once the websites are set up, maintenance is minimal although you do need to advertise their existence.

Investing

1. Invest in stocks that pay a monthly or quarterly dividend. Research the financial strength and future plans of the companies in which you are interested. You may prefer to invest in a particular industry, such as energy, or spread your investments across several stock market sectors.

2. Buy bonds and other government securities to collect quarterly residual income. Bonds usually pay a dividend until maturity, but the issuer can call them in early. This happens when a significant change in interest rates occurs, and it is cheaper for the issuing government agency to redeem the bonds rather than pay interest.

3. Invest in the various financial products offered by your bank or credit union. You can buy certificates of deposit that pay the interest to you rather than allowing it to accrue.

Create Virtual Information Products

1. Create virtual products such as ebooks, blogs, articles or manuals. Information products are much easier and cheaper to create than physical inventions. Once you have taken precautions to protect your creations from theft, you can sell them many times on the Internet with a simple download.

2. Sell or license your original photography or online artwork. Royalties vary dependent on whether you are selling from your own website or offering your work on a freelance website.

3. Work as a ghostwriter for an upfront fee plus a percentage of the royalties. If the product sells well, then you may earn a significant sum of money for several years.

Tips & Warnings

• Diversify your residual ventures, so if one industry or activity does not earn a profit, you will still earn passive income from other sources.

References

• Stretcher.com; Make Money While You Sleep; Liz Folger
• Young Money; The 5 Phases of Building Your Cash Machine; Loral Langemeier; Oct 2009
• Stretcher.com; Niche Marketing; Bob Osgoodby; 2011
• Motley Fool; 13 Steps to Investing Foolishly; Tom and David Gardner; 2011