Affiliate marketing, if you dont already know, is a risk-free form of advertising in which a company pays its affiliate partners a commission for sales and/or leads generated through the affiliates marketing activities.

Most affiliate programs reward their affiliates once for a sale, but some reward their affiliates over and over again. This is called a residual income and this, my friend, is what I call earning smart money.

Residual income, also known as passive income, is income that continues to be generated after the sales effort has been expended, this compared to a linear income ( a wage or one time commission) is a more effective way to make money online and the true secret to creating wealth. When you earn a linear income you are being rewarded directly for your efforts. But when you earn a residual income your efforts dont expire, you continue to earn money from your initial efforts and you have time to devote to other things, including learning how to improve your marketing techniques.

Heres an example: merchant A and merchant B both offer web hosting services. The first merchant offers a one-time commission type of affiliate program that pays $80 for every sale you make as an affiliate. The other offers and a residual affiliate program that pays only $10 for every single affiliate initiated sale. Now, initially you will want to work with merchant A since $80 is a larger offer. However, consider what making a lifetime commission on an initial sale is worth and suddenly $80 isnt such an attract offer.

If you direct traffic to merchant A and it is converted into a sale you will only get paid once. But merchant B will reward you monthly for as long as the customer you have referred to the merchant continues to use the web hosting service. This means that without working any harder you are actually increasing your income.

What would you rather do work hard to get paid once or work hard and get paid several times over.

Residual affiliate programs are not always easy to find, but they are worth the hunt if you want to find the secret of creating wealth. Many companies prefer to operate linear income opportunities. However, you can usually find passive income opportunities tied with weight loss programs, web hosting sites, and music/video download sites. In other words sites that work on a subscription basis are great places to look for residual income opportunities. Each time the customer renews his or her subscription or policy you earn a commission.

Note however, that just because you are earning a residual income does not mean that you can cut yourself from your customer. In order to get the customer to renew their subscription or continue to purchase products from the merchants site, you have to keep in touch with them. So while you do not have to throw your marketing efforts into gaining a new customer, in order to gain financial stability, you do have to put time and effort into making sure the customers you do have are satisfied. Often it can just be contacting your customer to remind them of the renewal date. But some communication is required therwise you could lose potential profits.

But merely calling to remind a customer of their renewal date is no way as much work as working 50 hours a week for a set linear wage.

Most people who have made a significant amount of money online will attest to undertaking a residual income strategy. And if you are serious about finding the secret to creating wealth and financial freedom for yourself online then it is definitely something to consider.