Entrepreneurship with Employees

Starting your own business can be a risky venture, but if it is successful, you can generate a passive income with it. Owning a business can take a lot of work up front, but when your system is in place, it will make money for you, especially if you have employees doing the tasks of running the business for you. In hiring employees you are leveraging the time of others to maintain your income rather than your own as you would with contract work or a full-time job. Once your business is successful, you can extract yourself from the day-to-day tasks of running the business and delegate responsibilities to your employees.

Real Estate Investing and Being a Landlord

A real estate investing and owning rental property has a strong passive income component to it. If your property is in good shape and the tenants keep it that way, it only takes you a few hours a month to collect rent and take care of any maintenance problems. Real estate investing takes a good bit of education and experience to learn how to do it right and make a generous profit, but can be a significant source of passive income.

Cash Generating Products

Being an entrepreneur is one thing, but inventing a product is another. If you invent a product that is widely used, you could generate passive income for the rest of your life and all of your children's lives, and so on. This could include and product that you could patent, book or music sales, computer program sales, etc. Being an inventor can be hard to begin with, but if what you have catches on, it can be a huge source of passive income.

Investment

There are several levels of passive income involved in investment which depend on how much time you are willing to dedicate to them and whether you will be paying due diligence to your investments or to the work of your financial advisor. All in all, investing can yield the highest amount in the shortest time and takes the least amount of work to begin with, but it also holds the most risk. It is passive income because of the small amount of effort you have to put in to make a return, but it may not be as regular as you would like as the stock market is as variable as the weather.

The first level of passive income you can get from investing is by choosing the investments yourself and watching them carefully on individual stocks, options, bonds, and trusts. This has a very sharp learning curve, especially if you haven't educated yourself well, so it can be a risky way of generating passive income to begin with. Once you've established your investment patterns and portfolio, it can give you some very good returns with a small amount of effort on your part.

Another level of passive income through investing involves getting into an Actively managed fund. You would hire a professional financial advisor to manage your portfolio and your job would be to monitor his or her performance based on your gains.