What is Passive Income?

Passive income is money earned with minimal ongoing effort or active involvement. Unlike active income, where you trade time for money (like a salary or hourly wage), passive income allows you to earn revenue with little day-to-day management.

Common sources of passive income include:

1. Rental Income: Earnings from renting out real estate properties.
2. Dividends: Payments made by companies to shareholders from their profits.
3. Interest: Earnings from savings accounts, bonds, or other interest-bearing investments.
4. Royalties: Income from intellectual property like books, music, or patents.
5. Affiliate Marketing: Earnings from promoting other people’s products or services and receiving a commission for sales made through your referral.
6. Peer-to-Peer Lending: Earning interest by lending money to individuals or businesses through online platforms.

While passive income requires an initial investment of time, money, or both, it’s designed to generate ongoing revenue with less active involvement once it’s set up.