What's The Difference Between Residual, Affiliate, and Passive Income?
Let's chat about 3 different kinds of income - what each one is and how you can incorporate them into YOUR current business to build additional income streams without creating more work.
Most of you know that I had gotten COVID the beginning of August. It's been an interesting journey. I'm so much better than I was. I have a ways to go yet, but I am so grateful that I have been given a second chance. And I'm looking at my COVID experience as kind of a God-Smack. See, I had gotten to the point where I was so busy that I wasn't enjoying life at the level that I could, and I was starting to feel a lot of pressure. And at my age, (66) that's not where I want to be.
I want to have fun with my business because I find that the more fun I have, the more people I can impact, the more fun we all have and the more money we all make. I don't know if that relates to you at all, but for me, fun is really important. And so as I've been through this recovery process and being able to finally speak and not have to use oxygen and not coughing all the time, it's been interesting because I've always loved affiliate income and passive income and things. And I just never utilized it to the point that I could have. So what I'm trying to do is show you what I wish I'd done years ago... but it's not too late for me and it's definitely not too late for you.
What's the difference between residual income, affiliate income and passive income. Let's differentiate them, and then at the end I'm show you how, regardless of what business model you have, you can incorporate two or three of them into your business without it increasing your workload. It's about working smarter, not working harder. We've all heard that, but it's about also being very intentional in what we're doing and how we're setting things up.
The first income I want to talk about is residual income. Now, this is mostly through network marketing companies. It's an incredible model. Did you know that more women have become millionaires because of the network marketing industry than any other way? Yeah, that's pretty powerful. It is powerful, but it's also a lot of work. So there's two different ways that people make money in the network marketing industry. They can sell products and some companies are awesome and they allow you to make great money and have a great income just on selling the products. You don't have to build a team. A lot of other companies, they require you to have a team and that's where you make the majority of your income.
So you get to choose which model do you like best. I don't want to be a network marketer. I don't want to grow a team. So I'm in a network marketing company because I love the products, but I can make great money by selling the products. I don't have to build a team. I already raised six kids. Why the hell would I want more? No, but at any rate, but the cool thing is is that as the customers order each month or every couple months or whenever they do order, I still get a check for bringing them in. Plus it gives me the opportunity to stay in touch and chat with them, which is my all-time favorite of course. So residual income is where you are working hard in order to bring it in. You're putting forth the effort and then it keeps coming.
But the other thing you need to understand about residual income is that it's not promised, it's not guaranteed. And so you may get to a certain level. I've seen this happen various times in network marketing companies and then the person who you is there has been working it really hard and has thisteam, and then maybe they have to take a step back. One was because a parent was really ill and they had to take time from their business to do that.
Another one was where they were sick. There's different things that happened. And when they weren't they're actively working the business, all of a sudden the team members started kind of fading away and being inactive as well. So for the most part, a lot of times you have to be pretty actively engaged with your team members in order to believe in them and to help them believe in themselves on and on and on. I hope that makes sense. When you stop working it, chances are it's not going to be too long before your income significantly drops.
The second thing that I want to talk about is affiliate income. This is one of the two ways that I made money while I was still laying in a hospital bed due to COVID and I couldn't talk and all this other lovely stuff. One of the benefits of affiliate income is that you're selling somebody else's products, but they create the capture page. They create the sales page. A lot of times they have the email sequence, everything like that. So as an affiliate marketer, your only job is to get your offer in front of the eyeballs of the people who may be interested.
Now, because of my business background and the connections I have are entrepreneurs, it's really easy for me to find products and services that would make sense for their businesses. That way I'm offering something that is relevant to them. My only job is only to get them in front of the offer. I do that by creating a story and then sharing it in email and on social media. The affiliate company follows up and converts from there. Generally it's a one time sale.
But there are times when affiliate income becomes residual income. there are membership sites that pay monthly. For instance, AWeber. I don't know if you're familiar with AWeber, it's an email autoresponder. I give my affiliate link to people (if they don't already have an email autoresponder). If they sign up, I get paid a couple of bucks each month. (It's free until you reach 500 subscribers).
Because they signed up underneath me, it gives me the opportunity to reach out and say, "Hey, since you signed up under me, let me help you set this up. Let help you maybe create a template. Let me help you create your first couple of emails and give you a format so that you understand how it works so that you can get the most engagement and increase your open rates," all of that kind of stuff. So that's what an affiliate income is.
The third income stream I want to talk about is passive income. Passive income is where you don't have to work to make money. You don't have to build a team. You just invest a little $$$ (under $400) and get paid every week. I'm in two different passive income opportunities. Both also pay me bonuses when I share and people sign up under me so I earn even more.
And the thing I love about it is that I got involved way back late last winter, because I could put in under $500 and start making money. One pays about 5% weekly plus then I get other bonuses. The other one pays 5%-13% each week, depending on how you set it up. I put the money in and step away. 🙂
I hope that that helps explain the difference between residual, affiliate and passive income.
Now, regardless of what business you have, you should be able to add two and maybe three of these income streams.
If you're in a network marketing business, you're already in the residual income model and that's great. So how do you add additional income to the people you're already talking to or who are on your team without adding more work to yourself? You want them to be successful, right? Absolutely. And so what do you use for an auto responder? You should have an email list. That's your property, that's the only thing you really own. So what do you use for an email responder? Do you use a VPN so that your computer is secure and your financials are secure? Maybe that's what you share.
What are some of the things that you use on a regular basis that maybe cost a little bit of money each month, but you can recommend and offer them your affiliate link? Now you're increasing your monthly income a bit more without adding more work.
We've got Black Fridays coming up. A lot of times you make a whole bunch of money during that time if you've positioned it correctly. So when you get that money instead of just going and thinking you're going to have this incredible Christmas that is going to be over in 24 hours or whatever, invest a little bit of that money in a passive income opportunity and watch it grow!
If you are a coach and work with clients, promote your autoresponder, maybe new lighting that they need or a better camera on their computer that you can turn around and you could recommend and give your Amazon link. There may be memberships in different groups that you want to say, "Why don't you join this group here? You're going to learn this for the next few months or whatever." It may be courses. There's such a variety of different things that you can promote. It gives you the opportunity to help your clients. This increases their trust in you because you're showing them how much you care.
How many coaching clients do you have that are making money and then it just gets "lost:? What if you could show them how they could take that $500 of what they've earned, put it in one of these passive income opportunities (with your affiliate link) and help them make more money? (Obviously you've invested and are earning $ each week so you can promote with 100% confidence and show your back office for full transparency.)
I hope that this helped you understand the difference between the three different income models. You should be able to easily adapt at least two of them into your business. We don't want to put all of our eggs one basket. (We've seen what happens when one income stream dries up.)
I'd love to hear your comments. If you'd like to reach out and learn more about the products I promote, send me an email sue@suehenrytalks.com with 'BLOG POST" in the subject line. This will help me find and respond faster. 🙂
Warmly,
Sassy Sue Henry