As a financial cushion, it is important to learn how to build residual income. Residual income is passive income. Once a person takes the initial steps to set the money making wheels in motion, income will continuously come from the source without additional effort. Building a residual income takes time and effort more than anything else, so it is important for anyone interested in passive income to realize it will not happen overnight.

Combine Several Different Methods

The best way to build residual income lies in having more than one stream. This way there is still income if one source falters, and after watching how each stream works, one can place more focus on the stream that works best. Some methods of passive income include:

• Blogging: A blog is a wonderful way to earn money on the web because ads can be placed throughout the content, and products can be promoted through affiliate programs. These ads and affiliate promotions will earn passive income each time someone clicks the ad or makes a purchase.

• Joining an Affiliate Network: Choose products or services to promote through a website, blog or articles. There are products and services in every niche, earning incredible incomes for the people who promote them.
  

• Writing Articles: Many websites such as Associated Content and Bright Hub offer their writers an upfront payment for their articles in addition to a revenue share based on the total number of times their articles are read by others. Similarly, writing articles and submitting them to article directories is a great way to drive traffic to a blog or website where other products are promoted.

Focus on Advertising and Promotion

The important part of building a residual income lies in advertising and promotion. If people aren't aware of the website, product or service, there's no traffic to click on ads and make purchases to earn the income. Each day, spend time marketing and promoting the sites where residual income will come from. There are a variety of methods to accomplish this, including:

• Search Engine Optimization: Write the content for the website or blog and articles with the search engines in mind. Use keyword research tools to find commonly searched phrases related to the product or service you are promoting, or the article topic you are writing about. Using these phrases sparsely throughout the content in a natural manner will do wonders in helping the site move through the ranks, earning free traffic.

• Social Media: Choose a few social networks such as Facebook and Twitter to become active on. Offer links to sites, blogs and articles throughout the profile, encouraging people to click and read. Simply promoting will not encourage people to click the links, so getting to know people is a very important aspect. Submit articles to various social bookmarking websites such as Digg and Reddit, for another boost in traffic. Take time to promote other material in addition to your own, for more effectiveness.

• Link Exchanges and Paid Advertising: Find others who are trying to earn income on the web to exchange links with, and consider using paid advertising online and in local newspapers to get additional traffic and increase awareness.

When promoting material, make sure analytics are available for the website so you can see traffic volumes and where they are coming from. Pay attention to trends. Are people leaving the site as quickly as they find it? How many people are making purchases? Use this data to improve your advertising techniques and website content. The return on investment will likely be indicative of the effort, meaning the more time spent on building the passive income, the more income there will be. Be patient and consistent to build strong residual income.