Capital Gains From Appreciated Assets. ... Dividend Income. ... Interest Payments. ... Rental Income. ... Business Income. ... Earned Income Royalties and Selling Rights. Passive income can be a great way to help you generate extra cash flow, whether you’re running a side hustle or just trying to get a little extra dough each month, especially as inflation rages throughout the economy. Passive income can help you earn more during the good times and tide you over if you suddenly become unemployed, if you voluntarily take time away from work or if inflation keeps chipping away at your purchasing power. With passive income, you can have money coming in even as you pursue your primary job, or if you’re able to build up a solid stream of passive income, you might want to kick back a little. Either way, a passive income gives you extra security. And if you’re worried about being able to save enough of your earnings to meet your retirement goals, building wealth through passive income is a strategy that might appeal to you, too.Automated technology to help you build wealth. Tech-driven, personalized investing and diversified portfolios. Start with as little as $10. Paid non-client promotion. Click expand details for more info.Earn a variable 4.00% APY* with a Betterment high-yield cash account. Cash Reserve via Betterment LLC, which is not a bank. Requires opening a brokerage account. Betterment LLC only receives compensation from program banks; Betterment LLC and Betterment Securities do not charge fees on CR balances.Tailored For Your Personal Success, Offering Understandable and Actionable Guidance That Inspires Smarter Choices. Paid non-client promotion.Passive income includes regular earnings from a source other than an employer or contractor. The Internal Revenue Service (IRS) says passive income can come from two sources: rental property or a business in which one does not actively participate, such as being paid book royalties or stock dividends. “Many people think that passive income is about getting something for nothing,” says financial coach and retired hedge fund manager Todd Tresidder. “It has a ‘get-rich-quick’ appeal… but in the end, it still involves work. You just give the work upfront.” In practice, you may do some or all of the work upfront, but passive income often involves some additional labor along the way, too. You may have to keep your product updated or your rental property well-maintained, in order to keep the passive dollars flowing. But if you’re committed to the strategy, it can be a great way to generate income and you’ll create some extra financial security for yourself along the way. Passive income is not… Your job. Generally, passive income is not income that comes from something you’ve been materially involved in such as the wages you earn from a job. A second job. Getting a second job isn’t going to qualify as a passive income stream because you’ll still need to show up and do the work to get paid. Passive income is about creating a consistent stream of income without you having to do a lot of work to get it. Non-income producing assets. Investing can be a great way to generate passive income, but only if the assets you own pay dividends or interest. Non-dividend-paying stocks or assets like cryptocurrencies may be exciting, but they won’t earn you passive income.If you’re thinking about creating a passive income stream, check out these 23 strategies and learn what it takes to be successful with them, while also understanding the risks associated with each idea.One popular strategy for passive income is creating an audio or video course, then kicking back while cash rolls in from the sale of your product. Courses can be distributed and sold through sites such as Udemy, SkillShare and Coursera.Alternatively, you might consider a “freemium model” – building up a following with free content and then charging for more detailed information or for those who want to know more. For example, language teachers and stock-picking advice may use this model. The free content acts as a demonstration of your expertise and may attract those looking to go to the next level.Opportunity: A course can deliver an excellent income stream, because you make money easily after the initial outlay of time. Risk: “It takes a massive amount of effort to create the product,” Tresidder says. “And to make good money from it, it has to be great. There’s no room for trash out there.” Tresidder says you must build a strong platform, market your products and plan for more products if you want to be successful. “One product is not a business unless you get really lucky,” Tresidder says. “The best way to sell an existing product is to create more excellent products.” Once you master the business model, you can generate a good income stream, he says.