Passive income is earnings derived from a rental property, limited partnership or other enterprise in which a person is not actively involved. As with active income, passive income is usually taxable. However, it is often treated differently by the Internal Revenue Service (IRS). Portfolio income is considered passive income by some analysts, so dividends and interest would therefore be considered passive.

Many affiliate programs will often run promotions with good discounts or giveaways that might be attractive to your audience. For example, if you're an Amazon Associate and the site have a big Holiday Sale, it would be the perfect opportunity for you to promote discounts to your website visitors. This is a great way to promote your offers while also providing good value to your audience. 
I actually had quite a bit saved up before I got on the journey to FI and thanks to the market run-up over the last few years and the increased supplemental income coming from my side businesses, my “passive” income and theoretical investment income (assuming 4% withdrawal rate) currently covers over 130% of my total expenses. Once we sell our house and lower our expenses even further, an even higher percentage of my expenses will be covered so although I was targeting only the essentials for FI, I’ll likely have everything covered and then some by the time I finally pull the plug on my career.
Teamwork. Everyone in your household—even your children—must have a say in the written budget. This is the only way to get every person’s buy-in. Working together means taking from one category to fund another (e.g., extracting money from, say, your clothing budget to fund your entertainment budget) until each person is on the same page. Once everybody is on board—once everyone is committed to financial freedom—it is much easier to gain the traction you need.

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As discussed, the only way to take advantage of investment opportunities is to have the money to invest. The reality of successful investing is that there is a certain point where you reach critical mass, and the returns generated on your assets can change your life (e.g., earning a 10 percent return on $10,000 is only going to net you $1,000 before taxes—hardly earth-shattering, but the same return on a $1,000,000 portfolio is $100,000, which has far more utility despite requiring the same effort and research).
Many affiliate programs will often run promotions with good discounts or giveaways that might be attractive to your audience. For example, if you're an Amazon Associate and the site have a big Holiday Sale, it would be the perfect opportunity for you to promote discounts to your website visitors. This is a great way to promote your offers while also providing good value to your audience. 

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Hang in there, Adam. I’m in the similar boat as you. I’m 51, looking to retire @55 when my son goes to college (his tuition is already saved in separate 529 account). @4% withdraw rate, we have enough assets to generate passive incomes of $250K+, and our annual living expense is <$100K. Neither me or wife have pension or medical coverage, but we do have 401K and some prior HSA savings.
​I’ve been into home décor lately and I had to turn to Etsy to find exactly what I wanted. I ended up purchasing digital files of the artwork I wanted printed out! The seller had made a bunch of wall art, digitized, and listed it on Etsy for instant download. There are other popular digital files on Etsy as well such as monthly planners. If you’re into graphic design this could be an amazing passive income idea for you.

I find it easy just to figure out what lifestyle you want, what it costs, and then make that your monthly nut. We relocated to a low cost-of-living midwest community, with excellent schools, and a medium-sized city within a 30-minute drive. My military retirement covers about half of our nut and we’re making up quite a bit more than the other half with work / contracts we’ve landed. We will save the remainder, pay off our house so that reduces our nut even further, then start jamming enough money into passive-income generating investments so that we can quit working entirely if we want, though work right now is interesting enough and is on terms that we set, so I’m not in a hurry to quit working anyway. As always, Sam, a good piece that I enjoyed reading…
Rental properties are defined as passive income with a couple of exceptions. If you’re a real estate professional, any rental income you’re making counts as active income. If you’re "self-renting," meaning that you own a space and are renting it out to a corporation or partnership where you conduct business, that does not constitute passive income unless that lease had been signed before 1988, in which case you’ve been grandfathered into having that income being defined as passive. According to the IRS's Passive Activity and At-Risk Rules, "it doesn't matter whether or not the use is under a lease, a service contract, or some other arrangement."

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Robin, I was reading through the comments and saw your post. I don’t know if you will see this since it is so much later. I am a small animal veterinarian in Eastern Washington State. I was privileged and had support with education but still had about 70k in student loans. I will easily reach blockbuster level by 40. I am nearly 37 now. I did it through ownership. That increases income dramatically. Additionally, it is an investment, my biggest, that you can sell when your done. Essentially, it allows you to earn income twice, once through dividends and then secondly through capital gains when you sell. I am also currently investing in real estate and downsized my primary residence. I had to transition my mentality about money and define wants vs needs but I did it. I still see other associate vets I work with that will barely scrape enough by the time they are 65. If you want to talk more please feel free to reach out to me.
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