Passive income refers to the earnings generated from an enterprise or investment that requires minimal effort to maintain or generate. It is income that you receive regularly without actively participating in the day-to-day operations or spending a significant amount of time and effort.
Here are some common examples of passive income:
- Rental Income: Earning money from properties you own and rent out, such as residential homes, apartments, or commercial spaces.
- Dividend Income: Earnings from owning shares of stock in companies that distribute a portion of their profits to shareholders in the form of dividends.
- Interest Income: Earning interest on savings accounts, certificates of deposit (CDs), bonds, or peer-to-peer lending platforms.
- Royalties: Earnings from intellectual property, such as royalties from books, music, patents, or trademarks.
- Affiliate Marketing: Earning commissions by promoting and selling other people's products or services through your online platform.
- Online Business: Generating income from an automated or outsourced online business, such as dropshipping, e-commerce, or creating and selling digital products.
- Real Estate Investment Trusts (REITs): Investing in publicly traded companies that own and manage income-generating real estate properties.
- Peer-to-Peer Lending: Earning interest by lending money directly to individuals or small businesses through online lending platforms.
- Stock Market: Earning passive income through capital gains by investing in stocks and holding them for the long term.
- Creating and selling digital products: Generating income by creating and selling e-books, online courses, software, or other digital products.
It's important to note that while passive income can be a great way to diversify your income streams and build wealth over time, it often requires upfront effort, initial investment, and ongoing maintenance to set up and maintain the passive income source. Additionally, the level of "passiveness" can vary, and some forms of passive income may still require occasional monitoring and management.
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