Linear versus residue income

Linear income is income where you exchange or trade the number of hours you work for payment in the form of a fee, wage, commission or salary. With the economic crunch and with more and more companies downsizing, linear income is becoming more and more difficult to maintain and sustain. Even communist run countries such as China and Vietnam are opening up or privatizing many of their government own industry sectors. The so-called iron rice bowl associated with government-funded industries is a thing of the past.

Many people suddenly found themselves out of job as company restructured or relocated to other countries so as to reduce operating cost so as to maintain competitiveness.
Despite the uncertainties associated with linear income, the majority of the Singapore population preferred to earn their living via linear income. The wonderful promises of residue income associated with network marketing and other investment schemes does not seems to bother or create any upbeat excitement at all. Why is that so?

Firstly, most of us would prefer to stay within our own comfort zone. The thought of having to do something different in particular with regards to actively seeking new prospects and clients is enough to put us off. Furthermore, many of us are so get used with the routine life of working for others, not having to worry if the company we work for or the department we are attach to is doing well or not so long as we get to keep our job and receive our monthly paycheck on time. Indeed there are many successful people who have gain financial freedom through linear income earnings and retire comfortably when they reach the early 50s. The retirement age in Singapore is 65 years old though. At times I wonder if this is what we call quality way of life, to work till we reach 65 years old and after that to retire in the old folks home perhaps cause even though we may have the necessary savings till to keep us moving, we may not have the health to enjoy it by then. Unless you are the top ten percent high-income earners, most people would not even dare consider nor think about early retirement.

On the other hand, it is equally alarming to know that many people, not just in Singapore but equally true in America where people retired broke without adequate savings.

It was said that it is normal for a person to be affected by retrenchment at least once in his lifetime working career. For some people, retrenchment benefits could be a welcoming reward indeed, especially for those who have work for decades with the company. Most companies in Singapore still adopt the 1-year to1 month compensation benefit policy even though the Government is not endorsing nor favor it. There are also those who are not as lucky and do not qualify for attractive compensation package either because of the lack of years of service. (Some companies set minimum years of service in order to qualify for the1 year 1-month compensation benefit while most companies in America do not have such scheme at all.)


There are also those who are really lucky enough to quickly get a new job in matter of days or so after collecting the big pay severance package. Luck is not always on our side though. Such lucky situation is more the exception rather than the norm.

My personal thoughts are that linear income wage earners has nothing much to worry about so long as they live within their own means, keep regular savings and maintain good health. For others who wish to retire early in life and looking forward to achieve financial independence in life linear income is definitely not the best option to consider unless you happen to be the chief executive officer or holding a top management position of a company.

Don’t wait till you are old to want to pursue your dreams whatever they are. Life is unpredictable. Hope for the best but be prepare for the worst. Work to live and not live to work. Dare to dream and set your goals high enough to attain for without any aspirations and goals we will tend to procrastinate. Procrastination is the biggest

Here’s an interesting article regarding linear versus residue income. Enjoy reading!
http://www.article-voip.com/Article/Linear-Income-vs--Residual-Income--Knowing-the-Difference-Will-Change-Your-Life-/47