A guide to getting checks in the mail without any extra effort.
5 min read
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For the last several years, passive income has been hailed as a near-perfect approach to generating wealth, appealing to entrepreneurs, investors and average working professionals alike. But the promise of effortless income generation sounds suspicious on its surface. Is there really a way to generate revenue without hours of work? And if so, is it accessible to the majority of the population?
Strictly speaking, passive income is any kind of recurring income that is generated without ongoing demands for your time and effort. Wages are paid hourly and salaries are paid on an annual basis, with both forms of compensation contingent upon your working a specific number of hours; these are not passive. Instead, a passive income source would be one that sends you a check in the mail periodically, without any effort on your part.
Related: 7 Ways to Make Extra Income Even With a Full-Time Job
To better understand what passive income is and how it works, let’s look at some of the most commonly cited examples of passive income in action:
All these methods are proven to be capable of generating income. More than that, they’ve been responsible for developing many self-made millionaires. But it’s not the “income” part of the term we’re concerned with as much as the “passive” part of the term.
Passive income is rarely passive in the truest sense; while these (and other) passive income sources may require less effort than a full-time job, they may require effort in other formats and in other contexts.
Let’s take a look at each of these:
Related: 10 Ways to Make Money While You Sleep
Some people have claimed that passive income is a myth, but that may be a little extreme. Instead, a more accurate assessment may be that passive income isn’t truly passive. No matter what, you’ll still need to put in the time and effort to make your income-generating strategy work; it’s just in a different format than your conventional job.
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