Residual income on the other hand isn’t quite as golden as passive income. More work is involved and less freedom. Residual income gives up many more possibilities as we now have direct customers. Monthly or yearly services and membership sites are two good examples of residual income business models.

I differentiate passive from residual income by the amount of time needed to maintain the program and how many, if any, employees or contractors are used to deliver the service. An example of a passive income model would be to create a website whose content is generated by a data feed. Data feeds are updated [...]