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How To Leverage What You’re Doing To Create Residual Income
In a conversation this week I was explaining to a gentleman how I make money. He paused and then asked me this question. The implication was clear. If people are paying me money while I sleep, I must be conning or manipulating them. Unfortunately, he does not understand the difference between ‘linear’ and ‘residual’ income. That’s not hidden information but if you understand it, you may have people asking you – “How do you sleep at night?”
Episode #836 June 26, 2022
Hi this is Dan Miller – and yes you’re listening to the 48 Days Radio show – where each week we take 48 minutes to dive into real-life questions about finding your passion, deciding what kind of life you want to live – and then finding or creating work that allows you to show up every day, excited to be able to do something that is meaningful, fulfilling – and profitable. This is where normal, indecision and ambiguity come to die. Welcome to the 48 Days Radio Show.
Thank you for being a listener of this podcast. I love hearing from you and being allowed to think through the questions we all have about finding or creating work that matters, for people who care.
What is the difference between “linear” and “residual” income?
Is it possible to do something once and get paid 1000 times?
Why some people think I’m a con artist.
Is it wrong to make money from just giving people a place to talk with each other?
Quotation:'Wealth isn’t made by the hour – it’s made with ideas and a plan of action.”Dan Miller Click To Tweet
We have new models for working and making money. You don’t have to go to an office to make money anymore. The way we can connect and work has changed dramatically.
I recently had a conversation with a cousin of mine who worked hard all his life building houses and did well. His active income has now stopped because he was making linear income where you do something once and get paid once.
I shared with him how my income has not stopped because I am making residual income where you do something once and get paid 1000 times.
A few ways to earn residual income:
• Writing a book
• Creating a course
• Having a membership site
• My granddaughter Clara has created several art designs that folks can order. She doesn’t have to create each one of those or even fulfill that order. That same design can be put on multiple products. Here is her Red Bubble page (all residual income). And here is her Etsy page.
His initial reaction was that I must be taking advantage of people in order to be able to continue making money — residual income.
What is linear income?
A fast-food worker who is getting paid by the hour is getting a linear income. But so is a doctor or dentist. If they stop working, their income stops.
When an artist makes a painting or a piece of jewelry and sells that one piece of art, it is linear income.
Applying the Venn Diagram To Add a Residual Income Stream
I have a cousin whose family processes and produces maple syrup. They produce about 6,000 gallons of pure maple syrup. A half-gallon of their pure maple syrup sells for $38, so they’re producing about a half million dollars of maple syrup. But they also produce and sell maple sugar, maple cream, maple candy, maple barbecue sauce, coffee and more. And they have the equipment for other produce the maple syrup from their own maple sap and teach and coach people about maple syrup production. So their operation is a combination of linear and residual income.
In the off-season, they also use their trucks to deliver water. They raise Angus cows, chickens, pigs, vegetables and more.
The idea of having multiple streams of income is a good one. But it’s also important for those different streams to have some overlap.
For instance, when I first started out, I was teaching in a classroom, auto detailing and running a health and fitness business. Those were all very different streams of income.
If you look to create a Venn Diagram of your different streams, you can start to see visually how they overlap so activity in any one area fuels activity in the others.
No matter what it is that you’re doing, there are things right around it that you can do to expand your income, impact and your potential.
How a Midwife Can Add Residual Income and Create a Venn Diagram
Last week, I addressed a question from a very successful midwife. In her regular midwife job, she is earning a linear income. She is paid for her time. So she could have a class for expectant mothers or even train nurses who want to become midwives. She’s written a book, Nightlife of a Midwife, so she’s already moving into residual income. She could do a directory of midwives, start an online community for midwives, develop a course to help midwives get their certification, hold an event or conference for midwives. The list goes on and on of the things that she can do to move from a linear income to a residual income. But as you see, those things can all overlap and feed each other as part of her Venn Diagram.
At 48 Days, the money we make is primarily residual income:
So how do I sleep at night? Very well because every day I get notes like this.
Anything you invest in 48 Days, I expect you to get a 10X return on your investment. Some have seen more than 100X return on their investment.
What are you doing to increase your impact, influence and income. If you leverage what you’re doing like these examples, you can create new income sources, some of which are residual.
Get Dan’s Venn Diagram for how to maximize one area of knowledge into multiple streams of revenue – 48days.com/venn
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