Gone are the days of mid 50’s and 60’s when a family could survive on a single income.

Today the inflation and economic factors are such that survival on two incomes has become hand to mouth. Going by this trend we can very well imagine what the future holds for us.

Two incomes certainly will not be enough. It would be smart to prepare for the worst and expect the best instead of vice versa.

That being said it is best to have multiple incomes flowing into your household to secure your future in the insecure world we now live in. The concept and importance of extra income becomes all the more apparent.

People who have had a large amount of wealth have always known and taken care of this financial obligation. If one income dries up, you can always rely on the other streams of income. If your successful with your extra business you can only get richer, no harm in that.

Those with less financial means have always been in a dilemma regarding this. Loss of one income really affects them adversely and it could take years of hard work before normalcy returned. Not to mention, the rippling effects of financial distress that could cause a lot of emotional turmoil.

Having diverse sources of income gives you support to fall back on. If one source were to vanish, you would not feel the difference. You should have enough time to reorganize and regroup and be back on happiness highway, safe and sound.

There are two kinds of extra Income- linear and residual.

Linear income is the extra income you earn on an hourly, daily, weekly or monthly basis. There is no more future commitment attached to it from your end or form the receiver’s end.

Residual income is an extra income where you work hard once and reap the fruits of it all for many years in the future. The reward for the same effort paid over and over again.

In the normal course of a career, an individual earns a linear income through a job or a profession. You are earning only for the time you can spare on work on a daily basis. Some earn a higher linear income. More people are trying to shift to residual incomes and away from their linear incomes through the extra income route in order to have a more secure retirement and future. It is a good idea to start with one residual extra income effort a year.