Passive income is a steady stream of unearned income that doesn’t require active traditional work to maintain. Common ideas for earning passive income include investments, real estate or side hustles.Passive income is a regular cash flow that requires little or no daily effort to maintain. Passive income is considered unearned income by the IRS because it doesn’t come from active employment. Examples include investment income or rental property income.
This is the opposite of active or earned income, which is generally defined as income received from working at a job or as a contractor. That’s not to say passive income is easy money — in fact, the opposite can be true. Most ways to generate passive income require an upfront investment of either money, time or both; the income part comes later (in some cases, much later). But once you’ve made that initial investment, passive income can pay off for years to come.
You can earn passive income through investing in certain financial assets or by starting businesses that, after an initial investment, start to generate income without regular work. The taxes you’ll pay on passive income may vary depending on the source of the money, so make sure you keep careful records of your earnings.12 passive income ideas
Dividend stocks
Dividend index funds or ETFs
Bonds and bond funds
High-yield savings accounts
CDs
Rental properties
Peer-to-peer lending
Private equity
Content
Real estate investment trusts (REITS)
Crypto staking
Money market funds
