Residual income is another way of saying "passive income". You put up some money or time upfront to set up your revenues and then sit back and watch it roll in!
In real estate, in REITs, the stock market, or in a business (silent investor!). After the initial investment and some set up, you can earn income in your sleep!
If you're super creative and have an ear for it, create your own music beats! People will pay a premium for good stuff. YouTube is another great avenue!