Passive Income

Any income obtained with little or no ongoing work from the recipient.

Passive income is usually received as a result of an earlier effort – for example, passive rental income is paid to the owner of real estate who put in the initial work to buy a rental property, and there is little ongoing work involved in maintaining the income from their real estate investment.

A classic example of passive income is dividend payments from stock or business ownership.

The forms of income that most people are familiar with and receive most commonly can be considered “active,” including wages and salaries, bonuses, and other earned income.