Definition: Passive income refers to earning money from investments or business ventures where little to no active involvement is required after the initial setup. While passive income requires upfront effort, the goal is to generate a continuous cash flow with minimal ongoing effort. This approach to earning can help individuals build long-term wealth and provide more financial freedom over time.

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Examples:

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• Dividend Stocks: Invest in stocks that pay you regular dividends through platforms like Robinhood, E*TRADE, or Fidelity.
• Real Estate: Rental properties can generate monthly rental income with proper management through websites like Zillow for buying and renting properties or Fundrise for real estate crowdfunding.
• Digital Products: Create and sell products such as eBooks, courses, or software on platforms like Gumroad or Udemy.
• Affiliate Marketing: Promote products and earn commissions on sales made through your referral links using services like Amazon Associates or ShareASale.

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Why it’s important: Passive income can help young people build wealth, increase financial security, and allow for more time flexibility, as the income is not tied to active labor.