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Residual Income (What It Is And Why It’s Important)

Residual Income (What It Is And Why It’s Important)

What is Residual Income?

What is the goal of residual income?

How to find residual income?

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our income and finance knowledge!

Are you ready?

Let’s get started!

What Is Residual Income

Residual income is income that is generated even after the initial setup of the income source.

For example, if you start a blog to earn advertisement income from showing display ads or affiliate marketing income, you are effectively earning residual income as you continue receiving advertisement revenues even after you set up the blog.

In essence, once the initial work has been done to set up the income-producing asset, you are looking to assess how much money is left over to you once you have paid all the debts and costs associated with the income-producing source.

Typically, “residual income” is the amount of money that is left over once you have paid all the operating costs, expenses, debt obligations, and other costs.

For example, if you have a blog where you have to pay fees for hosting your website, you may have to pay for various premium plugins, or have other expenses associated with running and operating your blog, your residual income will be the amount of money that is left over after you paid your expenses.

For example, imagine that you incur the following costs to operate your blog:

  • Hosting fees: $500
  • Website maintenance: $500
  • Monthly subscription fees: $1,000

If your blog generates $5,000 per month, then you can say that you have a $3,000 residual monthly income.

In personal finance, residual income refers to a source of income that is generated from means other than the person’s main employment, salary, wages, or hourly work but rather from the investment of time or capital to generate an independent and steady stream of income.

Residual Income Definition

According to Investopedia, residual income is defined as follows:

Residual income is income that one continues to receive after the completion of the income-producing work. 
Author

As you can see from this definition, residual income can be characterized as:

  • For of income
  • That is generated 
  • Even after the initial effort for producing the income 

Residual Income Formula

There are several ways we can define residual income depending on whether you are looking at it from a personal finance perspective, corporate finance, or equity valuation.

In the context of personal finance, residual income is what an individual has in money left over after all his or her debts and expenses are paid to generate that income.

For example, a person may invest in a real estate property generating rental revenue on an ongoing basis.

The person’s monthly disposable income (residual income) is the monthly rental revenues minus the monthly debts such as mortgage payments, insurance, taxes, and so on.

In the context of corporate finance, the formula for residual income is:

Residual Income = Operating Income – (Operating Assets X Required Return)
Author

In other words, the profit leftover to the company from its revenues after deducting for the cost of capital used to generate the revenues is the company’s residual income.

In the context of equity valuation, residual income is used to estimate the intrinsic value of a company’s stocks.

In other words, it’s a measurement of a company’s economic profits by considering its economic earnings and deducting the opportunity costs for all sources of capital.

How To Calculate Residual Income

There are different ways of calculating residual income depending on whether you are looking at it from a personal finance point of view, corporate finance, or equity valuation.

The first application of residual finance is in personal finance where residual income refers to the money you have leftover from an investment source once you have paid your debt or financial obligations to maintain that income source.

The personal finance residual income formula is:

Residual Income = Monthly Net Income – Monthly Debts
Author

The second application of residual income is in corporate finance.

In this context, companies look to calculate residual income to better allocate their resources between different investment options.

Managerial accountants and businesses can use the following formula to calculate the corporate finance residual income:

Residual Income = Controllable Margin – Average Operating Assets X Required Rate of Return
Author

The third application is in equity valuation where residual income is used to estimate a company’s stock value.

Evaluation experts can use the following equity valuation residual income formula:

Residual Income = Net Income – Equity Chart
Author

Residual Income vs Passive Income

What is the difference between residual income and passive income?

Do they mean the same thing or are they different?

Although many use the terms “residual income” and “passive income” interchangeably, these two terms do not have the same meaning.

Residual income is more a calculation rather than a type of income as it is a measure of how much money is left or profit generated by the business once all its financial obligations are paid.

Typically, residual income is earned on an ongoing basis but it does not mean that it’s earned passively or without effort.

On the other hand, passive income is a type of income that is earned passively and without much effort on an ongoing basis.

To earn passive income, the investor or entrepreneur will need to spend time, money, and effort to set up the passive income-producing asset but once it’s up and running, cash flow is generated passively.

Passive income is attractive as it provides the owner or beneficiary with additional financial security as they receive a steady cash flow over time without having to dedicate themselves to that activity in a significant way.

Residual Income Examples And Ideas

There are many ways you can generate income residually or on an ongoing basis.

Here are a few examples of residual income that you can potentially generate:

  • Stock investment (dividend passive income)
  • Bond investment (interest income)
  • Royalties (from ebooks, photos, digital products, or software)
  • Affiliate marketing commission
  • Dropshipping income
  • Online course income 
  • YouTube video advertisement income 
  • Peer-to-peer lending 
  • Flip retail products 
  • Real estate investment trust 
  • Rental income 
  • Sale of informational products 
  • Online subscription business
  • Crowdfund real estate 
  • Create and license an app
  • High yield savings account 
  • Starting a blog 
  • Creating an online store (e-commerce)
  • Rent a room, apartment, or house 
  • Investment income 
  • Launch a podcast 

Individuals generating residual income (money earned from sources other than a person’s salary, wages, or hourly fee) can develop their net worth over time and achieve financial security and wealth.

Residual Income Meaning Takeaways 

So, what does residual income mean?

How do you calculate residual income?

What are some examples of creating residual income?

Let’s look at a summary of our findings.

Definition Residual Income

  • Residual income is money that is generated with an income-producing asset even after the income-producing work has been completed 
  • You can earn residual income through an initial investment of time or money (or both) 
  • In personal finance, residual income is generally considered to be passive income that you generate over time on a recurring basis (like rental revenues in real estate or affiliate marketing for online businesses)
  • In corporate finance, residual income is more of a measurement of performance or calculation as it represents the amount of money a company has leftover in a given period once all the costs for generating the revenues are taken into account (it’s the calculation of the company’s discretionary income once all expenses are paid)

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Passive Income Blogging (How To Make Money With Your Blog)

Passive Income Blogging (How To Make Money With Your Blog)

Looking for more information on Passive Income Blogging?

How to make passive income blogging?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into blogging and money-making tips!

Are you ready?

Let’s get started!

How To Make Passive Income Blogging

Imagine you can make money passively 24 hours a day, every day of the year?

Is that too good to be true?

It may sound like a get-rich-fast scheme that we’re talking about but, in fact, it is not.

There are many successful entrepreneurs currently earning significant sums of money from their blogs.

If you take the time to learn about blogging, build a website, write amazing content, and do that consistently over time, you have a good chance of being able to generate passive income blogging!

In this post, we’ll cover a number of ways you can generate an income passively by blogging.

Advertisement Income

Advertisement income is one of the easiest and most simple ways of generating income through your blog.

Essentially, you allow advertisers to use real estate on your blog page to advertise and in return you earn advertisement income.

What you need to do is to build yourself a website, host it, write blogs, guides, articles, and content to attract visitors to your site.

That’s pretty much it.

As visitors come to your site, advertisers will show display ads or other on your page targeting your audience.

Affiliate Marketing

Affiliate marketing is the process of marketing someone’s products and services to generate commission income.

In other words, you can use your blog to promote another company’s goods and services and to refer prospects or leads to that company.

When the company generates a sale through your lead, you will then earn a certain amount of commission (affiliate marketing passive income).

For example, if you promote a hosting company for someone to host their website, or a content management system like WordPress to run a blog, or specific plugins that can help bloggers, you can then earn a commission from these companies offering affiliate programs.

Although it may take some effort to set up your affiliate marketing structure, you will then earn a steady stream of commission income overtime every time your leads turn into paying customers.

What you need to do is to find an affiliate program that is suitable for you, sign up, and start promoting their products on your blog.

Dropshipping

Dropshipping is the process of selling physical products by promoting the goods produced and manufactured by another.

In other words, you use your blog to generate traffic and sales.

Once a sale is made, you will then pass on the order to the manufacturer who will produce the goods and ship them for you.

Dropshipping could be a great way to generate passive income by selling physical products.

Those who have a blog may consider tools like WooCommerce as a popular e-commerce solution.

E-Books

Another great way to make money is to sell e-books on your passive income blog.

Granted, writing an e-book does take time.

You’ll need to spend weeks, months, in some cases a year or two, to write a great book.

However, once your e-book is written and published, you will then generate passive income for every copy that you will sell going forward.

An e-book has the potential to generate passive income for a really long time.

You can use your blog to promote your own e-book or sell it using other platforms like Amazon.

If you happen to publish a hit, you can even consider selling physical copies to your clients.

Online Courses

Another excellent way to generate smart passive income is to create and sell online courses.

There are many blogs that provide guides, how-to’s, or other helpful resources to their readers.

Providing an online course is a great complement to the problem-solving focus blogs tend to achieve.

If you have knowledge in a certain area, you can create an online course and start selling them to your audience.

Just like an e-book, it takes time to create the course, create the video, and so on but when it is finished and ready to be consumed by your audience, you will potentially earn steady and recurring income for every sale of your course.

Good and useful courses can potentially earn you passive income in the long run.

There are platforms like Skillshare or Lynda that can host your courses if you don’t have a website or blog to host your own.

Digital Products

Creating digital products can provide you another channel to generate blog passive income.

In this case, you are using your blog to sell a digital product to your audience.

A digital product can be a piece of software you have developed, a mobile app, a web application, or something similar.

If you are a developer yourself, you may develop it yourself.

You can also think of the concept and hire others to develop it for you.

There are tools like Bubble that can also help you develop an application by yourself.

Earn Passive Income Blogging Takeaways 

Wouldn’t we all love to earn an income passively without having to go to work every day, have a boss tell you what to do, and where you have no control over your life?

With passive income blogging, you can achieve a life that you have dreamed of.

In this post, we talked about a few ways how you can create passive income blogging.

I’m not saying this to exaggerate the potential of generating passive income through blogs or make you do it.

What I’m saying is that based on my own experience and that of many others, you can earn good revenues from blogging to either get extra cash or to eventually live off your blog income.

Let’s look at a summary of our findings.

Earn Passive Income From Your Blog

  • A blog can be an amazing platform allowing you to generate earnings over time in a steady and predictable way, all passively 
  • You can write content to attract visitors to your site and quickly earn advertisement income 
  • You can use your blog to promote another company’s products or services to generate a steady stream of commission revenues
  • You can promote and sell physical products by using your blog for dropshipping 
  • You can also generate sales through your blog to earn money by selling your e-book, your online course, or your digital products 
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Revenue Vs Income (What Is The Difference And Why It’s Important)

Revenue Vs Income (What Is The Difference And Why It’s Important)

Looking for the difference between Revenue Vs Income?

Do they really have a different meaning?

What should you know?

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our financial terminology and knowledge!

Are you ready?

Let’s get started!

Revenue Vs Income 

Have you wondered what is the difference between revenue and income?

Revenue is a financial term referring to the total sales generated by a company.

Typically, the revenues refer to a company’s gross sales or its earnings before deduction of its cost of goods sold, taxes, depreciation, or other deductions.

On the other hand, income refers to a company’s profits.

As such, income is a term used to refer to how much a company was able to generate in profits after the business expenses and other deductions were made from its revenues.

Investors, financial analysts, and company management are interested in understanding a company’s revenues versus income as they can then get a better understanding of the company’s overall financial health.

The company’s total revenues will show how much a company generated in earnings in total and the company’s income will show how much of the revenue the company was able to keep as profits.

The trend of revenue and income fluctuations over time can also provide a sense of where the company was and where it is heading.

Consider a companies revenues as a means of showcasing a company’s ability to generate sales whereas a company’s income figures showcases a company’s ability to turn sales into a sustainable and efficient business operation.

What Is Revenue 

According to Investopedia, revenue is defined as follows:

Revenue is the total amount of income generated by the sale of goods or services related to the company’s primary operations.
Author

As you can see from this definition, we can qualify revenue in the following manner:

  • It represents how much a company generated from its main operations
  • The revenue figure does not take into account a company’s cost of goods sold or expenses 
  • You’ll typically find this number on top of your income statement 

Revenues can also be called “gross sales” or “top line” earnings.

What is Income

According to The Corporate Finance Institute, income is defined as follows:

Income can sometimes be used to mean revenue, or it can also be used to refer to net income, which is revenue less operating expenses (the “bottom line”).
Author

Based on this definition, we can qualify income in the following manner:

  • It represents a company’s profits after it has deducted its operating expenses 
  • The income figure allows us to see if a company is profitable in its business operations or not as it factors its operating expenses 
  • Typically, you’ll find the income figure at the bottom of your income statement

Income can also be referred to as “net income” or “net profit”.

Net Revenue Vs Net Income

Net revenue, or net sales, represents a company’s gross revenue less the cost of goods sold.

For example, if a company was able to generate $100,000 by producing and selling goods and it cost the company $60,000 to produce the goods, its net revenue will be $40,000.

As such, net revenues provide a better understanding of how much revenue a company can generate if we factor out its cost of goods sold.

Net income refers to a company’s total profits generated from its business operations.

The net income refers to the money left to a company once it has paid for the costs of goods sold and its cost of doing business.

For instance, if a company generated $100,000 in revenues, had $60,000 cost of goods sold, and had a total of $15,000 in depreciation, expenses, and taxes, its net income would amount to $25,000.

As you can see, the net income, or company profit, is what’s left from the company’s revenues once all costs and expenses have been accounted for.

Gross Revenue Vs Gross Income

Gross revenue, or gross sales, refers to the total amount of earnings a company generated from its business operations without consideration of its expenditures.

For example, if a company generated $100,000 in revenues to sell its products and had a $65,000 cost of goods sold, the company’s gross revenues will be $100,000.

In essence, by looking at the gross revenues, we are interested to determine how much the company generated in total sales revenues regardless of its expenditures.

Gross income, also known as gross profit or net revenue, refers to a company’s gross revenues less the cost of goods sold.

In other words, a company’s gross income figure gives us an appreciation of how much a company was able to generate in revenues, after deducting the costs of producing its goods, to see what’s left to fund the company’s cost of doing business.

Income vs Revenue Takeaways 

What is the difference between revenue and income?

What about revenue vs net income or revenue vs gross income?

It’s quite common for many to use the terms “income” and “revenue” interchangeably as they both represent cash flow to the company.

However, from a financial point of view, the terms income and revenue have a different meanings.

Financially speaking, “revenue” refers to top-line earnings whereas “income” refers to bottom-line earnings.

In other words, revenues only show sales without consideration of costs and expenditures whereas income shows net profit once a company has made an accounting deduction of its cost of goods sold, business expenses, depreciation, interest, taxes, and other expenses.

Let’s look at a summary of our findings.

Revenue Vs. Income

  • Revenue represents the total amount of sales generated by a company through its business operations
  • Income represents how much the company was able to generate in profits from its business operations
  • A company’s reported revenue is an important figure as it allows investors and business owners to assess a company’s top-line growth or declines over time
  • A company’s reported income is also important as it allows us to determine how well a company is able to translate sales into profits providing a measure of a company’s efficiency and financial strength 
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Affiliate Marketing Passive Income (All You Need To Know)

Affiliate Marketing Passive Income (All You Need To Know)

Looking to learn more about Affiliate Marketing Passive Income?

What does it mean to earn passive income through affiliate marketing?

What should you know?

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our passive income and affiliate marketing knowledge!

Are you ready?

Let’s get started!

What Does Affiliate Marketing Passive Income Mean

Affiliate marketing passive income refers to the idea or notion of generating steady, constant, and regular income from affiliate marketing strategies.

To better understand this concept, we’ll need to understand the notions of “affiliate marketing” and “passive income”.

Affiliate Marketing

Affiliate marketing or affiliate marketing program is a way you can generate an income by promoting the products and services provided by others.

In essence, through affiliate marketing strategies, you “promote” other people’s products and services and earn a commission whenever a prospect (that you referred) purchases the intended product or service.

For example, a company may choose to offer a 2% commission to another who is able to refer a paying client. 

If the client that you referred purchases $100, then you will be entitled to $2 in commission.

Passive Income

Passive income refers to the notion of generating an income without having to spend much effort.

In other words, to generate steady cash flow is to implement a structure that allows for a constant stream of income to be earned over time.

For example, you can build a website, implement search engine optimization strategies, write targeted posts, use pay-per-click advertisement strategies, and promote a certain product to earn affiliate marketing commission.

Once your initial setup work is done (that’s when you will have spent most of your time, energy, and money), you may then potentially start earning affiliate marketing commission in a steady and regular fashion with minimal effort to maintain the structure working optimally. 

Affiliate Marketing Passive Income Ideas

There are many ways you can earn income through affiliate marketing in a steady and regular way.

Here are some ideas to get you going in generating passive affiliate marking income:

  • Build an affiliate marketing blog
  • Create an online course 
  • Promote products and services through paid search 
  • Create an email list to generate affiliate marketing income
  • Promote service networks 
  • Promote digital products
  • Promote software solutions 
  • Promote ecommerce platforms
  • Promote products and services on affiliate marketing networks
  • Promote products and services on social media 
  • Promote products on affiliate marketplaces 
  • Build a YouTube Channel to promote products and services 
  • Build a website and drive traffic to it using SEO techniques 

There are many ways to build an audience and market various products and services to them that they will truly find value in purchasing.

If you know how to act as the middle person to connect a buyer to a seller, you have the potential of earning great income using affiliate marketing.

“Affiliate Marketing Passive Income” Takeaways 

So what do you mean by Affiliate Marketing Passive Income?

In a nutshell, with affiliate marketing, you help other brands sell their products and services and in return you can potentially earn a steady stream of income passively.

This does not mean that setting up your affiliate marketing structure does not take any effort or no money. 

That’s not the case.

Affiliate marketing is not an easy-get-rich-and-don’t-work scheme.

You actually need to know what you are doing, be strategic about your marketing strategies, spend time, effort, and money to make it happen.

However, if done right, affiliate marketing can be a great source of passive revenues 

Let’s look at a summary of our findings.

Affiliate Marketing Passive Income

  • With affiliate marketing, you have a great potential for earning passive income
  • Affiliate marketing is the process of marketing and promoting another’s products and services to earn a commission in return 
  • The reason why affiliate marketing can help you generate passive income is that once you implement the proper structure to market and promote a particular product or service, you can then earn a steady stream of income or commission without significant effort on your part
  • With affiliate marketing, you do not need to create your own product or render the services yourself, rather you refer someone to a company that specializes in producing the goods or offering the services 
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Do All Stocks Pay Dividends (All You Need To Know)

Do All Stocks Pay Dividends (All You Need To Know)

Do All Stocks Pay Dividends?

Are you wondering if all stocks pay dividends to their shareholders?

What should you know?

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our investing and company stock knowledge!

Are you ready?

Let’s get started!

Do All Stocks Pay Dividends

An important question that new investors ask is whether or not all stocks pay dividends to their shareholders.

The short answer to this question is no.

Not all companies choose to pay dividends to their stockholders and not all stocks pay dividends.

If you are looking to invest in the stock market to earn dividends, you must carefully choose the stocks that report paying dividends to their stockholders.

Keep in mind, unless you buy stocks where the company is committed to pay dividends (such as preferred stocks), a company is not obligated to pay out dividends long-term.

If the company needs to keep its profits to fund the business, that will be what the company will prioritize.

In essence, you can buy a company stock that pays dividends today that may continue paying long term or may eventually suspend or stop paying dividends.

You may also buy a stock that did not pay dividends but as their business operations expand and profits increase, they choose to start declaring dividends.

Let’s break this down further to better answer the question.

What Is A Dividend

A dividend is a payment a company makes to its stockholders from time to time.

All companies are driven by the need to earn profits and remain in business for a long time.

Some companies earn a profit large enough that they have sufficient funds to reinvest into the business to carry on with their projects but also distribute some of the profits to their owners.

Companies that pay dividends to their stockholders are those that have earned enough profits to have the ability to share the profits with their stockholders.

Say for example a company had a net income of $10,000,000.

The company can choose to reinvest $9,000,000 back into the company to fund the company operations and distribute $1,000,000 as dividends to its stockholders.

If the company had 1,000,000 stockholders, they would each receive $1.00 of dividend per share.

Types of Dividends

There are different types of dividends a company may pay on a company’s common stock.

The first type of dividend is what many are familiar with, the cash dividend.

Cash dividends are the most common type of dividends paid to stockholders.

As the name suggests, cash dividends are dividends paid in “cash”.

The second type of dividend is stock dividends.

Stock dividends are dividends paid by a company to its stockholders in the form of additional stocks.

In other words, the company issues a certain number of shares to the existing stockholder for every share of stock held by the stockholder.

Third, you have dividend reinvestment plans.

A dividend reinvestment plan or DRIP is a program offered by certain companies allowing you to reinvest your dividends to purchase additional shares of stock.

Fourth, you have special dividends.

A special dividend is a one-time dividend payment a company can choose to make to its stockholders to distribute profits.

Typically, when a company earns profits and has cash accumulating in its accounts for a long time, it may simply choose to pay a one-time special dividend payment to its stockholders.

A fifth type of dividend payment is on preferred shares.

Preferred dividends are dividends that are paid to holders of preferred shares.

As a holder of preferred shares, the company has an obligation to pay dividends on the stock (you can consider the preferred shares to work more like a bond).

Stocks That Pay Dividends

There are some companies that choose to pay dividends to their stockholders.

Typically, these companies that operate in mature industries have a mature business of their own (for example, banks or consumer good companies).

By paying dividends, these companies attract the type of investors who prefer to invest in stocks that pay them dividend passive income in a steady and regular fashion.

Companies that pay dividends also send a signal to the market that they are profitable and have strong fundamentals.

This will also help attract investors looking to invest in more stable companies and take less risk but hope to see their stock price increase over time.

Stocks That Do Not Pay Dividends

Companies that do not pay dividends are those that need all their earnings to reinvest in their business operations.

Companies that are expanding, entering new markets, operating in risky industries, or dealing with volatile markets may prefer to keep their profits to weather financial storms or fund their expansion operations.

By reinvesting all their earnings into the business, the company’s objective is to eventually earn more profits and achieve greater financial stability over time.

However, even well-established companies may choose not to pay dividends on their common stock.

Instead, they would prefer to use all their capital to either pay down debt or keep cash in their retained earnings for future acquisitions or fund other business ventures.

“Do All Stocks Pay Dividends” Takeaways 

So, do all companies in the stock market pay dividends?

Do all stocks give you dividends?

Let’s look at a summary of our findings.

Do All Stocks Pay Dividends

  • Not all stocks pay dividends
  • Some stocks pay dividends to their stockholders as they have excess profits to distribute to their shareholders 
  • Companies paying dividends to send a strong message to the market that they are profitable, are financially strong, and have the ability to fund the business and pay dividends to stockholders 
  • Some stocks do not pay dividends as they prefer to keep all their profits to fund their business operations, expand, pay down debt, develop new products, enter new markets, acquire other companies, and so on
  • There are many well-established companies that do not pay dividends to their shareholders as their corporate strategy is to reinvest all money back into the business 
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Dividend Passive Income (All You Need To Know)

Dividend Passive Income (All You Need To Know)

Looking for Dividend Passive Income?

How can you generate passive dividend income?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our investment and dividend stock knowledge!

Are you ready?

Let’s get started!

Dividend Passive Income

Dividend passive income refers to a type of income that is passively generated by holding company stocks that issue dividends to their shareholders.

In other words, “dividend passive income” refers to “dividend income” generated passively.

What’s truly amazing about passive dividend income is that once you purchase the company stocks offering dividends to the stockholders, with the mere passing of time, you can earn an income.

Since the investor of a dividend stock does not have to actively participate in generating income, we say that the income is earned passively (without the participation or involvement of the stockholder).

There are many investors that invest in dividend stocks in order to earn a steady stream of dividend income over time and potentially earn capital gains on the appreciation of the stock value over time.

When you earn dividends, you can either cash in the money (if you are looking to use it for something else) or you can choose to reinvest the dividends by buying more dividend stocks.

Reinvesting dividend income in dividend-paying stocks will result in a compounding effect allowing you to increase your wealth over time.

Dividend Stocks

To earn dividend income passively, you’ll need to invest in dividend stocks.

Dividend stocks are shares of corporations and companies (generally traded publicly in the stock market) who issue dividends to their shareholders.

Dividend income is one of the easiest and simple ways investors can generate passive income using their capital investment.

For example, imagine that a company stocks issues $1.00 of dividends to its stockholders every quarter.

This means that a person who purchases one share of stock of this company can expect to receive $1.00 every three months ($4.00 in a year).

If the investor had to pay $80 to purchase one stock, this means that the dividend yield amounts to 5%.

In other words, the investor can expect to receive a 5% profit (or yield) on its capital investment.

Dividend Income

A dividend income is an income received by a stockholder holding shares in a dividend-paying stock.

A company listed in the stock market may offer dividends to its stockholders.

In other words, a company generates profits from its business operations and then distributes some of that income to its shareholders keeping them happy and well-invested.

The money the company distributes to its stockholders comes from the company’s retained earnings.

Some companies pay dividends regularly and have been doing for years, they are called the dividend aristocrats.

However, companies do not have any obligations to pay dividends to their stockholders unless the specific stock entitles the stockholder to dividends (such as preferred shares).

When you purchase shares in a company that pays you dividends, you are effectively earning a dividend income and you will have to report that on your personal income tax.

Generating Passive Dividend Income

To generate passive dividend income, you’ll need to invest in stocks that pay dividends.

The first step is to do your research and identify possible stocks that offer dividends.

Then, you should consider the company’s track record and see how long they have been paying dividends (the longer their dividend paying history, the more you can expect to receive dividends going forward).

Next, you should evaluate the company’s business and assess if the company is in a profitable industry and has the potential to grow over time or maintain its business operations.

Finally, it’s a good idea to compare the company’s dividend yield representing the expected earnings on your investment.

The higher the company dividend yield, the more you can expect to earn a passive income by holding stocks in that company.

Passive Income Dividends Takeaways 

So, what is Dividend Passive Income?

Can you earn passive income by holding dividend stocks?

Let’s look at a summary of our findings.

Are Dividends Passive Income

  • Many invest in the stock market to build long-term wealth 
  • Buying dividend stocks provide investors with the ability to earn passive income over time and potentially see an appreciation in the value of the stock
  • Dividend income is a form of passive income as the investor or stockholder does not have to actively participate in the company operations to earn the income
  • Publicly traded companies that offer their stockholders dividends are called “dividend stock” and those who have a long history of offering dividends are called “dividend aristocrats”
10 best passive income stocks 
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Active income
Common stock dividend 
Dividend aristocrat 
Dividend coverage 
Dividend date 
Dividend reinvestment program 
Dividend stocks 
Dividend yield
Ex-dividend date 
Employee stock ownership plan 
Index funds 
Passive loss 
Payout ratio 
Qualified dividend 
Real estate crowdfunding 
Real estate fund
Real estate investment group 
Record date 
Residual income
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What Is The Difference Between A Wiki And A Blog (Overview)

What Is The Difference Between A Wiki And A Blog (Overview)

What Is The Difference Between A Wiki And A Blog?

How is a wiki different than a blog?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our blog and wiki knowledge!

Are you ready?

Let’s get started!

What Is The Difference Between A Wiki And A Blog 

Many consider blogs and wikis as tools, platforms, or spaces offering readers information and content related to a particular topic.

In fact, both the wiki and blog share the same attribute of providing useful content to the readers helping them better understand a subject matter.

However, what is the difference between a wiki and a blog?

Broadly speaking, you can consider a wiki to be content presented as facts without any editorial voice whereas a blog is contented written to engage with the audience.

Another way of looking at it is that wiki page content is generated in a collaborative way whereas blog content is created by an individual or business owner.

According to The College of St. Scholastica, a wiki is defined as:

A wiki can be defined as a web site that lets all participants actively create, revise, and delete the content found there. 
Author

On the other hand, a blog is defined as:

A blog can be defined as a ‘journal’ that the author publishes on the web or to a particular audience.
Author

Let’s briefly go over the main differences.

Platform Ownership

Blogs are generally owned by an individual blogger or a company blogging for business.

An individual blogger will write and publish content on his or her blog to cater to the interest of a particular niche market.

Similarly, a business will write and publish blog content to provide useful tips, guides, and informational content to their clients or prospects.

Businesses also own and operate a blow to promote their products and services by generating traffic to their website.

On the other hand, wikis are not necessarily owned by a specific individual or a business, they are crowdsourced libraries of knowledge. 

In other words, anyone can contribute to the content found in wikis and collaborate with others to build useful, well-curated, and accurate content on the wiki.

No single person can claim ownership of the wiki platform or its content.

Platform Content

The manner in which a blog and wiki present content are different as well.

Blogs are generally written in a way to attract the reader’s attention to a particular matter, to provide the reader with the blogger’s opinion on a subject matter, or to provide forward-looking content intended to help the reader.

Furthermore, blogs provide a platform where the readers can engage with the content, respond to product development, new events, or other responsive content.

On the other hand, wikis are not written in an editorial manner and are intended to present facts in a neutral fashion.

Think of an encyclopedia or a dictionary where the information is presented as a matter of fact.

Wiki content will present its content in a straightforward and informative manner whereas blogs will provide more casual content intended to engage with the reader.

Content Management 

Wikis and blogs are different in the manner their content is managed.

Blogs are sites where the author will publish an article designed to generate traffic either organically or through paid advertisements.

The articles are written optimized for SEO resulting in long-term and consistent traffic.

Once an article is published on a blog, the content will remain fairly constant over time and may be refreshed at a later point in time or removed.

On the other hand, wikis must be constantly kept up to date.

Once a wiki page is published, the information on the page must be kept up to date to reflect the factual reality of the day.

Otherwise, the wiki will appear outdated and lose credibility in the eyes of the reader.

It’s important to continually keep an eye on the wiki pages and ensure that any relevant information that arise is posted.

Key Differences Between Blogs and Wikis

Here are the main characteristics of blogs and wikis.

Wiki Characteristics

  • Have multiple authors
  • Anyone can create, modify, or delete content
  • Content is constantly modified and changing
  • You have revision history 
  • There are many links to other wiki pages 
  • The same topic can evolve over time
  • A good tool for research 
  • The main purpose is to provide facts and get deep knowledge on a topic 
  • The content is open for collaboration 
  • User comments are not generally permitted 
  • Generally used for projects, research, assignments, or similar work
  • There are a lot of interlinking of content 

Blog Characteristics

  • Generally have one or few authors 
  • The author creates posts 
  • The author authorizes user comments to be posted or not on the blog
  • Content is posted based on the author’s posting schedule
  • The content remains fairly static over time but may be refreshed 
  • The content is published in a time-stamped fashion 
  • The main purpose is to communicate and engage with the readers
  • You can view posts in a reverse chronological order 
  • They can be personal blogs or business blogs 
  • The content is for everyone on the web to see 
  • The voice is conversational

What Is The Difference Between A Blog And A Wiki Takeaways 

What Are The Differences Between A Wiki And A Blog?

What is a wiki?

What is a blog?

How is a blog different than a wiki?

Let’s look at a summary of our findings.

What Is The Difference Between A Wiki And A Blog?

  • A blog, short word for weblog, is a website where the author publishes articles on various topics providing the readers with useful content, guides, opinions, or entertainment
  • A wiki is a collaborative website where users or peers collaborate with one another to generate content presented in a more factual and neutral way
  • Through a blog, you can share useful information in different ways such as your article, videos, images, infographics, or other communication tools
  • Through a wiki, information is provided in a factual, passive, complete, non time-sensitive manner where users can edit, collaborate, and contribute to the content 
Aggregated blogs
Corporate blogs 
Personal blogs 
Portal vs website 
Social network vs portal 
What is a blog post 
What is a blogosphere 
What is a microblog 
What is a vlog
What is a vlogosphere 
What is a weblog
Why businesses need a blog 
Why businesses need a wiki 
Wiki blog
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Content management system 
Portal vs website 
Pros and cons of blogging 
Social network vs portal 
What did the work wiki come from
What is a business blog
What is a lifestyle blow
What is a podcast 
What is the best wiki software and hosting option
What is the difference between a wiki and a forum
What’s the best way to create a personal wiki
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Pros And Cons of Blogging (Overview: All You Need To Know)

Pros And Cons of Blogging (Overview: All You Need To Know)

What are the Pros And Cons of Blogging?

Should you start a blog?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into the pros and cons of blogging!

Are you ready?

Let’s get started!

What Are The Pros And Cons of Blogging

With so many people starting a blog, you wonder if it’s something that you should do as well.

The question we’d like to help answer is to understand the benefits and drawbacks of blogs and blogging.

If you are looking to start a new blog, here is what you should know.

I will cut to the chase and give you the pros and cons.

Blogging Pros

One of the most important pros of blogging is that you can get started quite easily.

What you really need is a blog template that you can get on places like Blogger, WordPress, or Tumblr and hosting services where you will host your website.

The second important advantage for starting a blog is that people who are interested in your articles and material will visit your website and return again.

Unlike business websites that are static in nature, blogs are constantly evolving, providing readers with fresh and new material, and keep users engaged.

Third, if you are blogging on a particular topic and have proper focus, you can create an audience and a community around your blog.

Your readers may have many points in common and can engage with one another through your blog.

Fourth, having a blog will help you reach many people.

As a result, blogs are a great source of outreach to your audience.

Blogging Cons

Running a blog, although it may sound great to many, does have some drawbacks.

If you want to have an engaging blog where visitors come back to read your material, you will need to publish articles regularly.

This means that you will need to put in the time, energy, and dedication to create useful, engaging, and great content for your visitors.

A second con to blogging is that you want to be careful what you write about and how you express your feelings or opinion.

Even though it’s your blog and you can write essentially what you like, you should make sure that you are not writing damaging statements or complaining about this that will come back and haunt you.

Third, if you are blogging for your business or to generate business income, it will not be easy to manage your blog professionally.

Don’t forget, your blog is a reflection of your business.

If your blog does not appear professional, appears outdated, or disorganized, your future clients will take note of that and get a wrong impression about your business.

It is common to run into technical issues where you will need to spend time and money dealing with.

Just like any website, your blog can be prone to cyber-attacks, technical issues, malfunctioning caused by incompatible applications or plugins, and so on.

You should constantly keep an eye on the proper functioning and performance of your blog to ensure that your visitors have a seamless experience when on your site.

List of Pros and Cons of Blogging

Running a blog can be a rewarding experience.

However, to succeed at blogging, you need to work hard, remain dedicated, and put in the time.

If you are looking to quickly get a sense of the pros and cons of blogging, you are at the right place.

I have put a list of the advantages and disadvantages of blogging so you can quickly see if blogging is right for you.

Here are the pros of blogging:

  • You can start a blog with a small initial investment 
  • You can present yourself as an expert in your domain 
  • You can work on your blog at times that are convenient for you
  • You can make money in different ways
  • You can build an audience worldwide 
  • You can drive valuable traffic to your website 
  • It provides you with an easy opportunity to earn extra money 
  • You can build multiple streams of income and scale your revenues 
  • Blogging revenues provide a high return on investment 
  • You can share your ideas and thoughts with the public 
  • You can promote a business, service, or anything you want 
  • You can help people with your blog content 
  • You can showcase your work 
  • You can enjoy the process of blogging 

Here are the cons of blogging:

  • You have to put in a lot of time to build a successful blog
  • You need to be disciplined and very patient 
  • You need to enjoy writing or learn to enjoy writing 
  • You need to understand websites, website hosting, and technical aspects of your blog
  • You will need to deal with a potentially rude audience 
  • You will need to be patient to earn any money 
  • You need to persist if you want to earn decent money from your blog 
  • You need to compete with millions of other bloggers
  • You must be comfortable doing everything by yourself 
  • You must take time to create great content 

Pros And Cons of Blogs Takeaways 

What are some blogging consequences?

Is full-time blogging worth it?

Blogging is something that pretty much everyone can do if they put their time and energy into it.

From my perspective, the pros of blogging outweigh the cons.

As a result, I strongly feel that if you think you are up for the challenge, don’t hesitate and dive right into the world of blogging.

What you need to do is to start a blog and keep working on it.

Eventually, with time, patience, discipline, and dedication, you will start earning money from your blog.

You may eventually earn enough money to make blogging your full-time job.

Let’s look at a summary of our findings.

Pros And Cons of Blogging

  • Blogs can be rewarding and provide you with a steady stream of income 
  • You should not expect to start a blog and make tons of money without hard work
  • There are many pros and cons to starting a blog and in this article I have summarized the key aspects you should consider before starting a blog
  • You can start a blog with little investment, have an easy platform to build an audience, get yourself known, and earn money
  • On the other hand, if you want to succeed as a blogger, you need to compete with millions of other bloggers, work hard, remain dedicated, and create great content 
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Blogging as a business 
Blogging mistakes to avoid 
Blogging networks 
Blogging tools 
How to increase blog traffic 
How to monetize your blog 
Online jobs that pay
Professional blogging 
Side hustle ideas
Sponsored posts 
What are WordPress plugins 
Why start a blog
Author
Affiliate disclosures 
Best automation tool 
Best hosting company 
Best SEO tool
Building an online course 
How to create eBooks
How to do email marketing 
How to make money building websites 
How to make money with WordPress 
What are advertorials 
What are sponsored posts 
What is affiliate marketing 
What is display advertising
What is passive income
Author

What Is Passive Income (Overview: All You Need To Know)

What Is Passive Income (Overview: All You Need To Know)

What Is Passive Income?

What are the different types of passive income you can earn?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our investing and money-making tips!

Are you ready?

Let’s get started!

What Is Passive Income

A “passive income” is a phrase often used to refer to a stream of income generated with little to no involvement of the business owner or the recipient of the income.

For example, a real estate property offering its owner a steady stream of rental revenue cash flow is said to offer its owner passive income.

However, the formal definition of passive income is said to be income earned by a person or business entity without a person’s involvement.

A passive income is one where a person is not materially involved in generating income.

In our real estate example, an income property generates income with the passing of time rather than a person’s efforts or active involvement.

As a result, many invest in real estate to generate an income passively.

In today’s digital economy, many use the phrase passive income to mean a business enterprise or operation generating income with little human effort.

For example, a blog generating income can be considered as an activity providing the blogger with passive income.

Another example is affiliate marketing generating an income for the affiliate marketer.

Passive Income Definition

According to Investopedia, passive income is defined as follows:

Passive income is earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved.
Author

As you can see from this “formal” definition, active income is:

  • Earnings 
  • Derived from rental property, a LP, or an enterprise
  • Where a person is not actively involved 

In today’s economy, the phrase “passive income” is used to refer to income generated from sources other than a person’s primary employment or business.

Passive Income vs Active Income

What is the difference between passive income and active income?

Financially speaking, passive income is a type of income that is materially generated from a business activity or operation without a person’s active participation.

More broadly speaking, passive income is a type of income that is generated by investing in financial products or business operations that may require some effort to implement but will then earn steady income over time without significant effort.

For example, if you start a blog and earn advertisement income on a monthly basis, you are considered to earn a passive income.

That’s the case as it takes time to set up the blog and write an article, but once the article is published, you will regularly earn an income for every person reading your blog.

Active income is, by contrast, a type of income that is generated through the full-time and active effort of the entrepreneur or business entity.

For example, a marketing agency will actively earn business income by offering marketing services such as search engine optimization services, website development, email marketing services, or other marketing services.

To render marketing services, the marketing agency not only needs to invest time, effort, and money in starting the business but will also need to continue putting in important effort and invest further money to generate active business income.

According to the IRS, passive income is defined as a trade or business activity in which the taxpayer does not participate in a material way or income generated by rental activities.

Why Build Passive Income

The idea of building passive income is attractive for many reasons.

Some may want to develop sufficient cash flow to be able to retire early or live a lifestyle that makes them happy.

The beauty of passive income is that it does not depend on you in a significant way for the income stream to come to you.

In other words, once you have built an income stream, you will continue getting the regular cash flows day in and day out, no matter if you are sick, if you have a job, if you are tired, or whatever.

The main reasons why you may want to build a passive income is to:

  • Increase your wealth 
  • Help you live the lifestyle that makes you happy
  • Protect yourself against the loss of your job
  • Provide you and your family with greater financial security 
  • Increase your savings 

How To Make Passive Income

You can consider passive income to be money generated from either investments, sources other than your primary job, or in a way that requires relatively less effort in relation to the amount of money generated.

The main objective of earning passive income is to earn a long-term and steady cash flow without having to commit a lot of time and effort on an ongoing basis.

For example, if a person earns money by blogging or affiliate marketing, he or she will need to put some time and effort upfront to build the blog or create the affiliate marketing structure, then will earn a steady stream of income (during the day and while sleeping!).

Earning passive income is not necessarily easy or something everyone can achieve. 

Just like any business venture, you need to put some time, effort, and money to build one or many profitable passive income sources.

Depending on the nature of the passive income you want to earn, the process, time, effort, and initial investment may vary.

For example, a person looking to find out how to generate passive income from a blog may not have the same initial investment need requirement as a person looking to find how to earn passive income from a rental revenue property.

What’s important is that you have a clear idea of what type of passive income you want to generate, do your research on how to get started, and then dedicate yourself to building your income stream.

Another important piece of advice is to persevere and not give up if in the first months or years, you do not generate the level of income you originally desired.

Types of Passive Income

What types of passive income are there?

Let’s answer this question by looking at the financial definition of the phrase passive income.

For income to be considered “passive”, it means that it is being generated without much participation of the recipient of the income or business.

In the United States, for income to be considered passive from a tax point of view, you’ll need to observe the IRS rules related to such income.

For example, according to the IRS, the following may be considered as passive income:

  • Self-charged interest
  • Rental revenue
  • Income from sources where you have “no material participation” in the business

For example, self-charged interest is when you personally grant interest-bearing loan money to your business entity (like a C Corporation, S Corporation, LLC or other).

Rental revenue is when you earn income from real estate investment properties.

Finally, income from sources where you have no material participation in the business is like a silent investor in a business earning an income without spending much time or participating in the business.

Passive Income Ideas

There are many ways that you can generate passive income to make money or generate extra cash.

What’s so attractive with passive income is that you can either choose to keep your career job while earning easy money on the side or you may even choose to leave your primary job dedicating yourself full-time to generate passive income.

Although there are many passive income ideas, here is a list of some ideas that can help you generate cash flow in a passive way:

  • Affiliate marketing 
  • Blogging 
  • Bond ladder 
  • Build your own website 
  • Create an online course 
  • Earn royalties 
  • Email marketing 
  • Flip websites 
  • Flipping retail products 
  • Fractional investing 
  • Instagram sponsored posts 
  • Invest in funds 
  • Investing in bank deposits 
  • Investing in bonds
  • Investing in dividend stocks
  • Investing in GIC
  • Investing in high-yield certificate deposit 
  • Peer-to-peer lending 
  • Real estate investment trust
  • Real estate rental income
  • Renting storage space 
  • Renting your house
  • Selling digital products 
  • Selling information products
  • Start a dropshipping store 
  • Starting a YouTube Channel 
  • Write ebooks 

Unlike what many may believe, generating passive income is not to get into a “get-rich-fast” scheme or make money without any effort ideal.

Even though it is true that income can be generated with less effort, you still need to put time, energy, and effort to set up the passive income structure and maintain it going forward.

What Is A Passive Income Takeaways 

So, what does passive income mean?

What is passive and non passive income?

What is a passive income stream?

Let’s look at a summary of our findings.

What Is Passive Income?

  • A “passive income” is a type of income that is earned with minimal labor or effort 
  • Typically, passive income sources provide a steady stream of income over time without an important or significant active participation of the owner or beneficiary 
  • A good passive income example is rental revenue from real estate properties, advertisement income from blogs, commissions from affiliate marketing, revenues from selling online courses, and so on
  • Passive income is contrasted with other types of income such as employment income, business income, or portfolio income
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What is business income
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What is interest income
What is modified adjusted gross income 
What is ordinary income
What is passive
What is passive interest 
What is personal income
What is portfolio income
What is taxable income
What is the best way to make money 
What is unearned income
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