What Is Residual Income And Who Else Wants It?
What is residual income? You're about to get a crystal clear picture of what it is and how you can get it. Why would you want it? Residual income can give you more time to do the things you really want to do. It's very possible to spend most of your life chasing dollar bills. I don't want you look back someday and realize that you may have missed some of your best moments. Robert Kiyosaki in his book, cash flow quadrant, tells a story that can help you better understand "what is residual income" and dramatically impact your life for the better. It goes a little something like this... Are You Building Pipelines Or Carrying Buckets?"Once upon a time there was this quaint little village. It was a great place to live except for one problem.The village had no water unless it rained. To solve this problem once and for all, the village elders decided to put out to bid the contract to have water delivered to the village on a daily basis. Two people volunteered to take on the task. Gene E. Eeus was the #1 and Les Smart was #2.
Les, immediately ran out, bought two galvanized steel buckets and began running back and forth along the trail to the river which was a mile away.
He would empty them into the large concrete holding tank the village had built. Each morning he had to get up before the rest of the village awoke to make sure there was enough water for the village when it wanted it. It was hard work, but he was very happy to be making money and for having one of the two exclusive contracts for this business. The second winning contractor, Gene, disappeared for a while. She had already studied the page "what is residual income", posted on her favorite website - Simple-Steps-To-Financial-Freedom.com She was not seen for months, which made Les very happy since he had no competition. Instead of buying two buckets to compete with Les Smart, Gene Eeus had written a business plan, created a corporation, found four investors, employed a president to do the work, and returned six months later with a construction crew.
At the grand opening celebration, Gene announced that her water was cleaner than Les's water. Gene knew that there had been complaints about dirt in Ed’s water. Gene also announced that she could supply the village with water 24 hours a day, seven days a week. Les could only deliver water on the weekdays. He did not work on weekends. Then Gene announced that she would charge 75% less than Les Smart did for this higher quality and more reliable source of water. The village cheered and ran immediately for the faucet at the end of Gene's pipeline. In order to compete, Les immediately lowered his rates by 75%, bought two more buckets, added covers to his buckets, and began hauling four buckets each trip. In order to provide better service, he hired his two sons to give him a hand for the night shift and on weekends.
For some reason, after college, his two sons never returned. Eventually Ed had employees and union problems. The union was demanding higher wages, better benefits, and wanted its members to only haul one bucket at a time. Gene, on the other hand, realized that if this village needed water, then other villages must need water too. She rewrote her business plan and went off to sell her high speed, high volume, and low cost, clean water delivery system to villages throughout the world.
Gene had developed a pipeline to deliver money to herself as well as water to the villages."
One big lesson here is "work smarter not harder". Another lesson lies in the comparison we can draw between the pipeline of water and the pipelines of cash that are ours to build. Gene E. Eeus, in the story, built a pipeline to carry the water from the river to the village. Once this pipeline was built, it required little effort to maintain, but continued to supply income to Gene for the rest of her life. Some people choose to build income that only pays them while they are on the clock. Others, after understanding what is residual income, choose to build income that pays them after the initial work has been done. Residual income works like a pipeline. You build it, and it continues to flow long after the majority of the work is done.
How You Can Generate Residual IncomeNow that you know clearly "what is residual income", you can take steps to build it in your life.Here are some things you can do.
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