Residual Income
From Part Time Work

Residual Income This is a long term stream of income that you receive. Residual income doesn't depend on your current efforts.

Residual income is paid because of your effort at some point in the past. There are basically two ways to earn residual income:

• Sell consumable products. Customers re-order and you receive repeat commissions.
• Bring new people into a business. Train and encourage them to be successful. Participate in their continuing success through a commission structure.

Here is a brief summary of these two methods of earning residual income:

Consumable products are items that are used up over time and need to be re-ordered. These items include soap, cosmetics, pre-paid calling cards, electricity, and phone service.

Large corporations often employ people to sell their consumable products. Employees who sell consumable products normally get paid by the hour or are on salary. They may or may not receive a commission for their efforts. Often, their annual raise or bonus is the only benefit they receive for their sales performance.

Independent contractors are not employees of a large corporation and do not receive a salary. They sell the company's products and typically get commissions, a percentage of the sales price.

Commissions may be a one time commission, paid when the initial sale is made. On consumable products, some companies pay a recurring commission whenever the customer re-orders.

These recurring commissions provide a long term stream of income that does not depend on the daily work of the independent contractor.

Multi-level marketing companies allow independent contractors to bring new independent contractors into the sales force. That is, one independent contractor sponsors, or brings in, another independent contractor.

An independent contractor who brings new people into the sales force often helps the new people learn to be successful in selling. This guidance or mentoring is rewarded by the company in the form of a commission structure.

Often the sponsoring person receives a percentage of the sales of those he or she sponsored into the sales force. This commission structure can extend several levels in the sponsoring process.

Commissions based on the sales efforts of people you bring into the sales organization provide a long term stream of income.

The commissions on sales of products generating residual income are typically lower than for one-shot commission payments.

One reason for this is that commissions are payable through several levels. For example, Cognigen pays commissions on sales through 7 levels.

But, think about this. Your initial 6% (or 11%) commission is paid month after month. When the service is used month after month, over a year your commission will be around 72% (or 132%) of the first month's price.

And your commissions can continue for years without any additional effort on your part.

This is the important point about residual income. It builds and builds.

Is it worth your effort? You bet it is.