Make Some Money

what is residual income?

put simply residual income is income you get without having to do any work. you may have to do some work initially to set this income stream up, but once running it should wash its own face and look after itself whilst providing income either daily, weekly, monthly or annually.

residual income investments are therefore investments you make that will earn you residual income. because you will be investing a sum of money to recieve residual income, a good measure of the investment is the ROI (return on investment).

ROI is worked out by dividing the return by the cost of the investment

Property rental return example
if we assume the property purchase price is £100′000
rent recieved is £6′000 per annum
interest rates are 5.5%

using an 85% mortgage (usual Buy to Let mortgage) you need to invest £15′000 as a deposit into the property. the return would then be £1′325 per year net of mortgage costs.

you have now invested £15′000 for a return of £1′325 per year giving you an 8.8% ROI (1325/15000). you have also boosted your residual income by £1′325 per year that you do not have to work for

using the ROI is a very good way to compare different residual income investments it shows you exactly how much you get in return for your cash