Passive, Leveraged and Residual Income

What does passive, leveraged and residual income means and how we can generate them? 

As clarity is power, let me define the terms used above so that we do not only speak the same language but have in mind the same definitions so that we understand each other better.

Income (according to wikipedia) is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received... in a given period of time."

Passive (according to wiktionary) is being subjected to an action without producing a reaction, taking no action, (finance) not participating in management.

Leverage (according to whatis.techtarget) in the physical sense, leverage is an assisted advantage. As a verb, to leverage means to gain an advantage through the use of a tool or efforts of others. For example, you can more easily lift a heavy object with a lever than you can lift it unaided.

Residual (according to wikipedia) is generally a quantity left over at the end of a process.

  

Passive, Leveraged and Residual Income 

Now that we defined the terms income, passive, leverage and residual let us see in short what do passive leveraged and residual incomes means.

Passive income

Passive income is an income received on a regular basis, with little effort required to maintain it.

There are two basic types of passive income:

1. Leveraged Income
2. Residual Income

Leveraged Income

Leveraged Income is earning income or money through other people’s efforts that generate value.

Each one of us has only 24 hours available to him/her every day but some people have Linear Income while others have Leveraged Income! What does this means and how is that possible? 

If you have a job and your job pays you per hour, your income will be linear as follows: 

H x N = I

Where: H means hourly wage, N means number of hours per day and I means your income.

Linear Income: 5 + 5 = 10 (linear = limited!)

If on the other hand you own your own business and you have 5 people working for you, you will leverage of their efforts and their time and your income will be exponential as follows: 

T x E² = FF

Where: T means time invested, E² means exponential growth and FF means financial freedom.
Leveraged Income: 5²= 25 (exponential = explosive!)

Residual Income

Residual Income is an income that keeps coming in month after month, year after year, from work you do just once. 

For example you wrote a good a book, made a good movie, recorded a good song and you will get paid forever whenever someone will buy copy of your work!

All entrepreneurs make their businesses into a source of passive income.

Why do you think Bill Gates is so wealthy? 

Because he utilizes efficiently the power of Leveraged and Residual Incomes. 

His company produces software leveraging from the efforts of thousands of skilled people and the software systems that his company has developed pay him Residual Income!

There are different ways to generate a passive income today but the one I want to tell you about here is the one that lets you capitalize on the two types of generating your passive income at the same time and in addition to that it offers a TRUE leverage because everyone involved will has the same amount to gain!!! 

JP Getty, America’s first Billionaire has said “I would rather earn 1% off a 100 people's efforts than 100% of my own efforts”. 

Burke Hedges has written a wonderful book called “The Parable of the Pipeline”, where he explained the concept of this brilliant idea that gives you both Residual and Leveraged Income. 

Watch this animated video to get the concept of this brilliant idea. 

How about you? Are you still like Bruno directly exchange his time for money or do you like to be like Pablo and start building your own pipeline for ongoing income?!

If you are interested in building your pipeline passive income, then fill out this form and start building your pipeline today!

The book “The Parable of the Pipeline” is a must read book for anyone who is engaged in building residual and leveraged income.

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