Residual Income In Your Bank Account
Your residual income is the financial little extra that is leftover in your hand after your bills are paid each month. The financial obligations are paid off and any extra money is left as residual income. But don’t forget to plan for every bill, not just the ones for this month, but the quarterly payments also.
You don’t really have total control of your residual income. It can vary from month to month depending on its source. What your earned income minus all your bills becomes your residual or passive income. It’s that little extra leftover. There are other places where residual income is found.
Other forms of residual income result from interest-bearing checking accounts, dividends from stocks and even money received from rental properties. Residual income comes to you as the result of a prior purchase or savings plan. The work you did before retirement counts toward your payment of a pension. The pension check is now residual income.
If you are renting out a house, all the income, after you pay the mortgage and repairs, would be considered residual income. If the mortgage is paid off, the original mortgage payment now becomes a part of your residual income.
Banks lend money faster to individuals who have residual income of some sort. The borrower looks like a good risk and the bank can then have a better guarantee that the loan will be paid. Residual income is definitely a plus. If the interest on the loan is low, you are better off making the loan rather than cashing in a bond that pays a higher interest rate.
Income is taxable. Except, pension checks are taxed differently in different states. Other residual income is taxed and you should file accordingly after talking with your accountant. The residual income can add up and it can be very helpful in many financial situations even if it is taxed.
It is important to keep track of all the financial dealings you undertake. If you are still working and do not have time to file taxes, then go to an accountant and have him take care of filing so that you avoid the wrath of the IRS. All your receipts for everything to do with your finances and residual income are important. Be a good bookkeeper. Have good habits,, it will help.
Look beyond today when you choose the money makers of tomorrow. Set up and put in place some sources that will provide you with residual income in the years to come. Be aware of how to plan for the future and how to use that planning to promote some residual income. The financial little extra can become your ticket for the future.
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