Who doesn't want income that just keeps coming in? Your residual income is all the extra money after all the personal debts are paid during a month. Having the residual income can make a big difference in your financial portfolio.

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.

Residual income, in most instances, comes on a monthly schedule. When you open your bank statement, you will see the interest you have earned on your checking account. This assumes you have an interest-bearing checking account. If you own stock in a company, you may not see your dividends until a quarterly statement. Any income that comes to you due to an original action on your part, is a residual income. Even pension checks are considered to be residual income.

Rental property produces residual income. When the renter pays his monthly rent, the income after your financial responsibilities for the property, becomes residual income. Once the mortgage is paid off, your residual income increases because the mortgage is no longer a financial situation.

The amount of residual income you can show a bank when applying for a loan is paramount in the bank's decision to lend you the money. It shows them that you have enough funds to assume the responsibility to repay the loan. With the loan money in hand, you assume a payment plan and may be paying less interest on the loan than you would have lost by dipping into a great stock that provides steady residual income.

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.

As with any earnings, you should make sure you keep accurate books. Sloppy bookkeeping can run you into trouble with the IRS. If you are still employed and have several rental properties, stocks, bonds and other residual income ventures, you might need help from an accountant. You need to make sure that you save receipts for ease in doing your taxes.

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.