Residual income is the type of income you make a result of earlier investments you made; this can come in the form of rents, royalties and dividends from shares of stock you bought earlier. Residual income has a lot of advantages. Imagine a landlord that built his house 40 years ago can still come around and demand that you pay your rent to him, and he has been collecting all the rent for the past forty years and will still continue to collect until he is too weak to do so, and his descendants will still demand and continue to collect the same rent.
The same happens to a musician who played good music; he will continue to enjoy the royalties of his music since his music is still selling to new buyers many years after he played the music. The same thing is applicable to writers, Chinua Achebe and Oliver de coque are good examples of people earning royalties many years after they invested in music and books.
But share holders are the most benefactors of residual income. I can hold this argument because I have seen a investment of only a hundred thousand naira blossom into half a billion naira (five hundred million naira in under eighteen years), while the investor never ever soiled his hands working on his investments, after buying the shares. In fact he has been resting in his house either in the country or on holiday overseas! This is a little example about the power of stock investments.
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