Guaranteed home based residual income may be defined as income that is guaranteed to come with no or little effort. That kind of income should be able to survive a severe economic downturn or crisis otherwise it cannot qualify as guaranteed or fail-safe. Does such income exist? Economic recessionThe U.S based National Bureau of Economic Research (NBER) defines a recession broadly as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real Gross Domestic Product (GDP) growth, real personal income, employment (non-farm pay rolls), industrial production, wholesale-retail sales.”

A sustained recession may become a depression, a term usually used by economists to describe a sustained, long downturn in one or more economies. Since the Great Depression of the 1930s the NBER has identified 10 recessions of varying degrees lasting an average of 10 months i.e. from peak to trough. During recessions many businesses are tested to the limit and some do not survive.

According to many economic observers around the world, the world economy is heading into a major recession. In recent times there have been a number of bailout packages for major banks and capital markets by national governments to prevent the financial system from further deterioration and eventual collapse. The current credit crunch started in the US with homeowners who failed to pay their mortgage debts. The crisis quickly spread through the financial sector around the world, affecting shares and other financial instruments, as investors lost faith in efforts to ward off economic collapse.

In recent months many companies have avoided excess debt and large dividend payouts and used their profits to repair their balance sheets. How will home based residual income businesses respond to looming recession?Effect on online businesses Many home based residual income opportunities are based on affiliate programs that pay out commissions for services such as web hosting, selling digital products and tangible products, and providing information.

Affiliates are paid recurring commissions for recruiting new members and when recruits buy products. Many observers believe that internet home based residual income companies are likely to survive because of their low operating costs and the fact that commissions are paid out only when sales are made. Many offline companies are likely to turn to the internet to fulfill their needs due to the nature of internet advertising – it is relatively cheaper, highly targeted and measurable. This may explain why Microsoft and Google have been acquiring small players during recent months.

Reports that the world economy is heading into a major recession have caused consumers to cut back on spending. Some analysts have however pointed out that home based residual income opportunities may actually grow during the recession. Many people may turn to the internet as offline businesses shrink. The downside is that this will increase competition for webmasters. So, does guaranteed home based residual income exist? The old saying is true that every cloud has a silver lining. The way things are going lead some to believe that internet businesses including home based residual income businesses are likely to benefit from the recession.

Looked at from that angle home based residual income is possible. We shall know the right answers when the dust of the recession settles.