Transactional Income Versus Residual Income
Have you ever said something like, ‘I wish I had a dollar for every time I ………’. You fill in the blank there. Maybe it’s something like, ‘I wish I had a dollar for every time I carried out the trash’. What you have just described is a transactional income business model. You agree to perform a specified task for a specified amount of money.
On the other hand, have you ever said something like, ‘I wish I had a dollar for every time I saw someone riding down the road talking on a cellphone’. What you have just described is a residual income business model. You are placing yourself in a position to receive income based on the habits and lifestyle of someone else. Not a bad position to be in if you are the cellphone company getting paid the monthly bill from the subscriber.
The business that I spoke about in my last post follows this model. Setting yourself up to be in the middle of such monthly recurring bills. This is the business model that insurance agents have enjoyed for years. A person takes out an insurance policy, the agent gets a commission for writing the policy, then continues to receive residual income over the life of the policy. The same applies for investment brokers and mortgage bankers. A very sweet spot to be in. The work is done once, but the income continues month after month.
I’ll write more on this later. But if you want to find out more, email me at richard@richardcraver.com .
