(Background of image property of 401(k) 2012)
Let me first start out saying this is not an affiliate link bank; I am not going to tell you that doing all your searches through Bing or Swagbucks, or all your shopping through iBotta is passive income. Because it is not! Those are just incentive programs, to do your shopping through them, or to actually do work for them by building their businesses. Passive Income is income that does not come from trading your time for money; it is something that is sustained even when you are taking no actions. However, that does not mean there is no work involved!!!! Let’s get this straight; there is no such thing as money without effort. The closest thing is government cheese, but you still have to jump through a ton of hoops, live a very modest life, and be reliant on someone else. Passive Income streams tend to have a lot of work up front that yield a slow stream that takes only a negligible amount of time and maintenance later.
Stock Market: Dividend Stocks, Index Funds.
The key for passive income in the stock market is only to take the interest accrued out or dividends. Dividends Stocks are single company stocks that have a good track record of growth in the value of the stock as well as give little kickbacks called dividends. The key with the stock market as a passive income is that you do not remove the money that is generating the interest or dividends. The catch for this is that it takes a significant amount of cash (Work) to make any real life changing amounts here.
Real Estate: Rentals, Owner Financing, Lending.
The best thing about this category is that it all works together to allow for a lower point of entry. The bad part is it takes a long time or a lot working with many balls in the air to switch over from the person paying mortgages payments to the person receiving the mortgage payments. There are also so many different options for investing within the Real Estate industry. The baseline rule is getting someone downstream of you in the world to pay you a consistent cash flow.
Businesses: Franchises, Self Startups.
These take a lot of upfront work and time; businesses vary widely from restaurants to vending machines to small-scale blogs. Your imagination and motivation is the only limitation. Entry point can be very low like a blog or require significant capital such as a franchise. For passive income, the goal has to be generating enough income that you can hire people to do all the work and still yield an income.
Creative Royalties: Inventors, Authors, Musicians.
Usually taking a great deal of upfront work and marketing before any returns are seen. These once they are created passively create income. How much income mostly varies on quality, quantity, and marketing. For this not to be a business you have to hand this off to someone else such as a record company or a publishing house.