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The term "residual income" is a much underused term in the world of finance, yet it is one of the most powerful tools that an investor can use to build wealth and protect him or herself in the retirement years. Residual income simply means that an investment pays out without reducing the value of the principal.

Dividends, or a business which runs itself, are examples of a residual income.

Look for these types of income investments when thinking towards a retirement income. Even if these types of investments pay a lower interest rate, if they continue to give back, they are well worth it.

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14y ago

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