"Passive income is an income received on a regular basis, with little effort required to maintain it"
That being said, most passive income streams do require an additional effort or monetary commitment to get set up.
Here are a few common ones:
- Rental Property - does require some upkeep or a reduction in income to subsidize the management of the property.
- Bond Investments - investing in bonds can be expensive (the usually cost around $1000 each + trading fees, and like most investment vehicles, can lose up to 100% of their value (although this is unlikely in most cases)
- Dividend Income - income from equities that pay a cash dividend; these are usually financially strong and established companies such as Southern Company ($SO) and Verizon ($VZ). There are also trading fees associated with purchasing stocks.
- Pension- Social Security (until it runs out) or other funded pension program you are vested into, more than likely from working somewhere that offered this as a benefit.
Additionally, there are other alternative ways you can earn "passive income":
- Blogging - advertising and other referral sales income (if you weren't already blogging in some form, this really isn't that passive, but can be fun)
- Vending Machines - owning vending machines can be a little work to stock and maintenance them, but is an interesting alternative way to generate a "side hustle" income
- Royalties - recurring cash flow from the licencing of a patent, sale of books, music, etc. A useful invention or phone application
I would love to hear other creative ideas for passive income....