Converting ideas into streams of residual income to boost your pension

Creating residual income streams is not an impossible dream for those retirees charged with an entrepreneurial streak and the opportunity to do so online is open to every third age traveller. Residual income (also known as passive or recurring income) is income that continues to be generated after the initial effort has been expended.

In other words, you do something once and it continues to generate income, perhaps for years on end. Compare this to how most people focus on earning: linear income, which is one-shot compensation or payment in the form of a fee, wage, commission or salary. Linear income is directly proportional to the number of hours invested in it (40 hours of pay for 40 hours of work) but one of the great advantages of residual income is that once things are set in motion, you continue making money from your initial efforts, while gaining time to devote to other things - such as generating more streams of residual income.

Offline opportunities are few and usually linked to special skills

Take writing for example. You put pen to paper and produce a book, the proposal for which is accepted for publication. You may be lucky enough to obtain an advance but here is how your residual income opportunity really starts to take shape. When your book is published the royalties from home, export and online sales will home in at around 7.5 to 10 per cent per unit. Say it quickly and it doesn’t sound like much but these basic royalties soon mount up to provide you with a handsome return year after year. When you start to hit reprints and multiple editions it gets even better and that’s when your residual income opportunity takes off.

Editions licensed to another publisher for manufacture;
Single issue or one-shot periodical rights;
Translation rights;
Sound broadcasting rights;
Merchandising rights;
Educational reprint rights;
Royalty-inclusive sales;
Mail order sales;
Book clubs;
PLR (public lending right: libraries).

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