Residual Income That Just Keeps Coming In
Who doesn’t want income that just keeps coming in? Your residual income is all the extra money after all the personal debts are paid during a month. Having the residual income can make a big difference in your financial portfolio.
You don’t really have total control of your residual income. It can vary from month to month depending on its source. What your earned income minus all your bills becomes your residual or passive income. It’s that little extra leftover. There are other places where residual income is found.
Residual income, in most instances, comes on a monthly schedule. When you open your bank statement, you will see the interest you have earned on your checking account. This assumes you have an interest-bearing checking account. If you own stock in a company, you may not see your dividends until a quarterly statement. Any income that comes to you due to an original action on your part, is a residual income. Even pension checks are considered to be residual income.
Rental property produces residual income. When the renter pays his monthly rent, the income after your financial responsibilities for the property, becomes residual income. Once the mortgage is paid off, your residual income increases because the mortgage is no longer a financial situation.
The amount of residual income you can show a bank when applying for a loan is paramount in the bank’s decision to lend you the money. It shows them that you have enough funds to assume the responsibility to repay the loan. With the loan money in hand, you assume a payment plan and may be paying less interest on the loan than you would have lost by dipping into a great stock that provides steady residual income.
Income of all sorts pay needs to pay income tax. Pensions are dealt with on a state to state basis. The tax on the residual income doesn’t outweigh the benefits of getting that income. Residual income is a terrific way to supplement your finances. It could be your nest egg!
It is important to keep track of all the financial dealings you undertake. If you are still working and do not have time to file taxes, then go to an accountant and have him take care of filing so that you avoid the wrath of the IRS. All your receipts for everything to do with your finances and residual income are important. Be a good bookkeeper. Have good habits,, it will help.
Having good sources of residual income often begin years before. Royalties on a short documentary that you did after college keep coming in! Any lifetime commissions or rental properties just keep paying off in most circumstances. The residual money is in the bank account. It is there because all the other bills are paid off and there’s the extra that just rolled in.
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