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Residual Income Streams: Is it better than earning a linear income from having a job?
Because this site is called Quit Your Job Early, you probably already know how we would answer the above question – we’d take the Residual Income Streams any day of the week… And Unless you are one of the ‘lucky few’ who actually loves their job, I would guess that you’d prefer to be earning residual income rather than going into work every day too.
The question is rarely whether people want to earn Residual Income Streams but more of a question of how can someone earn them without risking everything they have and completely altering their lifestyle. I’d say that’s a pretty good question, wouldn’t you. I have a theory that most people’s dreams get smaller as there age gets older. I also believe that a big part of that is because their JOB wears them down. It becomes ’stale’ and a ‘necessity’ rather than an ‘invigorating’ and ‘exciting’ place where they spend their time.
I have a lot of respect for anyone that works hard to supply for the needs of their family. I think that having a JOB is going to be a necessity for most people at some point in their life (and in a lot of cases, all of their life) but I also know that their are ways to put yourself in a position to not have a job and they all have one common denominator – Leverage.
When I say that a job gets stale and becomes a ‘necessity’ I mean that people lose their ‘get up and go’ and replace it with ‘I have to go because that’s just the way the world works’. I think a big reason that people wear down as they get more and more comfortable in their jobs is because they see believe that they are really worth more. They believe that they have more to offer the world and either their job doesn’t pay enough or it takes up all of their time. Take a look at this graph.
Traditional Job Income Projection
One of the things about having a job is that there is a ceiling on your income that you have no control over. If you have JOB, your reality is that you are allowing someone else to determine what you’re worth which can be a good thing and/or a bad thing depending on what your personal situation is. There were times when I was building my business and residual income streams that I thought that having a job would be a good thing BUT those thoughts quickly passed when I remembered how much I hated feeling constrained when I did have one. If you believe that you have a lot to offer the world and want to control your own financial situation then you have to find a way to quit your job early and take control.
As is diplayed in the diagram above, it doesn’t matter what point you’re at in your career, if you want to make more income, you will have to prove to someone else (your boss or another company that wants to pay you more than your current company) that you are worthy of your pay. Typically that process takes time. A traditional career will play out something like this.
- Find a job out of highschool or college and get paid very little because you have no experience
- as you gain experience, your income will grow fairly rapidly through the first few years of employment
- After 3-5 years of employment, you will hit an income plateau (the raises go from being significant to being minuscule)
- You’ll spend 3-5 more years proving your worth to your boss until you get promoted
- this process continues over the span of career – or you simply find a level that you’re happy with and you’re income rarely grows
I know steps 1-3 because I experienced them first hand when I came out of college
- I got hired for $29,000/yr
- Went from $29,000/yr to $50,000/yr in 3 years
- Went from $50,000/yr to $52,000/yr in years 4 and 5
- I quit half way through year 5
I made a conscious decision to take control and attempt to earn residual income streams because I believed that they would give me a better chance to live my perfect lifestyle. When you earn residual income streams you’re income projection will go from the example above to one of unlimited potential (represented below)
Income Projection for Residual Income Business
Don’t kid yourself though. Earning residual income will take work. It doesn’t have to be overwhelming work, it just needs to be consistent and effective work. It may take you 6 months to replace your current income, it might take you 5-10 years to replace it, but does it really matter if it allows you to live your perfect lifestyle while you’re young rather than waiting until your 65 and retired from your JOB.
If earning residual income streams is new to you, or if you just want to learn more about what options you have, take the time to read this article – Passive Residual Income.
Until Next Time, Cheers to Your Success and Quitting Your Job Early,
