Residual profit

Residual profit – this term applies in the Financial Law in some jurisdictions, where refers to the profit made by a physical individual, once they have paid all their taxes and debts. This is the pure income, which usually has not been achieved from direct financial source (a salary, for example), but from indirect, secondary source (an investment). Money made from rent, from artist productions, etc. from dividends in a company are examples of residual profit. A synonym is “residual income”.

The role of the residual profit is important because in some cases it may help you to easily obtain loan. Somewhere called also “passive income”. An antonym is “residual loss”, representing financial losses from such investments. The foundation of the term is the word “residue”, which refers to something left over, once something has been taken away.

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