Most people only think of income as earned income from working actively at a job. That is the most popular type of income, selling your time by the hour for a wage or by the week for a salary. However that is not the only type of income, along with active income there is also passive income from sources that do not require much active engagement to benefit from the earnings. 

Passive income can be defined by the money that is earned on a regularly time frame that requires little time, energy, or effort, if any by the person earning it. Passive income can be recurring at a set time on a daily, weekly, or monthly basis. 

There are different types of passive income.

  1. Capital gains from portfolio income of investments. 
  2. Capital gains from a trading system. 
  3. Dividends from stocks. 
  4. Interest income from bonds. 
  5. Interest from certificates of deposits. 
  6. Income from real estate rentals when you have a manager. 
  7. Royalties. 
  8. Licensing fees. 
  9. Online learning courses. 
  10. Website advertising.
  11. Owning a business that has a manager. 
  12. Car rentals through Turo. 
  13. A Limited partnership.
  14. Affiliate marketing.

There are many other forms of passive income and the opportunities keep increasing as technology opens more ways to monetize things and ideas. These streams of income can all require some levels of engagement at times but are primarily ways to earn money that do not require large amounts of your time after they are bought or created and systems are set in place. These income streams are not tied to your time, energy, or effort but instead reward you for owning the right assets with good systems in place to monetize them.

Many items on this list require you to hire a manager for them to truly be close to 100% passive streams of cash flowing income. Even then your job would be to hire a manager and hold them accountable. While no income stream is 100% passive you can get it close. There are also risks involved in any income stream and ownership of an asset and taking risks are the way you create most passive income streams. 

What is Passive Income?