Up Escalator Income
Down Escalator Income

Robert Allen talks about the concept of up escalator income vs down escalator income.

Down Escalator

Imagine you are trying to climb up a down escalator. When you stop, the escalator takes you back down to the bottom again. All of your efforts are wasted. In order to just maintain your position, you have to keep climbing.

If you have a job, or a service business, your income is dependant on your time. When you stop working, your income stops (but the bills don't). This is called down escalator income.

Up Escalator

Now imagaine you are on the up escalator. You don't have to climb at all, the escalator does all the work and eventually takes you up to the top. Up escalator income is a source of residual income that does not depend on your efforts. For example, any investments, royalties on a book or music, any residual income based business.

After you finish thinking, << go back.