Passive Income

Passive income is earnings derived from a rental property, Limited Partnership, or other enterprise in which a person is not actively involved. It contrasts with active income, which is earned through direct involvement in a business or employment. Passive income typically requires an upfront investment of time or Money but can generate ongoing Revenue with minimal effort.

Examples of passive income include:

  • Rental Income: Earnings from leasing out property.
  • Dividend Stocks: Income received from owning Shares in a company that pays dividends.
  • Peer-to-Peer Lending: Interest earned from lending Money through online platforms.
  • Royalties: Payments received from creative works such as books, music, or patents.
  • Affiliate Marketing: Commissions earned by promoting other people’s products or services online.

Cases of passive income can include:

  • A landlord who collects rent from tenants without bEINg involved in day-to-day management.
  • An author who receives royalties from book sales after the initial publication effort.
  • A Stock investor who receives dividends from their investments without actively trading.