Passive income, also known as unearned income, is income that requires minimal effort to obtain1. It is the opposite of active income, which is income received from a job or business venture that requires active participation1. Passive income includes earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved1. There are three main categories of income: active income, passive income, and portfolio income1. Passive income can be generated by earning interest on savings, getting cash back or rewards on a credit card, renting out a space, purchasing dividend-paying stocks, and so on1. Here are some examples of passive income: Rental income: Rent out a garage, room, or a house or apartment if you have it1. Investing: When you invest, you use money you already have to make more money2. Asset building: This means acquiring an asset that earns money passively over time2. Asset sharing: Sharing in this sense means selling or renting out assets that you already own2. Please note that most passive income ideas require an initial investment of time, money, or other resources. They also require a degree of monitoring or regular maintenance to keep things on track2. As with active income, passive income is usually taxable, but it is often treated differently by the IRS1