Linear Income

Income can be either linear or residual, in this case, linear income refers to a job where you are paid either weekly, bi-weekly, or receive hourly wages. A linear income can be a job where you need to either clock in for every shift or be present in-office to physically receive your wages or income.

In most instances, linear income is seen as a wage that is only made when you are physically present to either complete a given task or conduct certain duties to receive payment. For example, if you only worked 20 hours during the week, you will only receive compensation for the 20 hours and nothing more.

Linear Income vs Residual Income

Linear income, as aforementioned, is wages or a salary paid on a weekly or bi-weekly basis after completing a given task or job.

Residual income, on the other hand, is paid to individuals or employees over time, meaning it’s a continuous stream of income received after completing one specific job or task. The best example of someone who receives residual income are actors, who receive an income or royalties from the films they have acted in.

Another example can be successful writers or authors, who receive payments or a sales percentage on their books. Even though they have written and published the book a long time ago, some part of the sale thereof still goes towards them.

What’s better: linear or residual income?

Linear income is a good way to make easy money in a short amount of time. Although it isn’t necessarily a lot of money you will receive, you don’t need to spend a lot of time doing it to get paid.

An example could be to perhaps pick up a few waiter shifts over weekends to make some extra cash. Perhaps even taking a part-time job as an assistant, or working for a remote company that only needs you for a few hours per week.

Residual income can make you continuous money throughout your life but requires a lot of knowledge, skill, attention, and time. Residual income can also take a lot of time before you start seeing a change in your financial situation.

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