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Glossary · money habits

What is Passive income?

Income earned with limited ongoing effort — dividends, interest, rental income, royalties.

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Truly passive income usually takes active effort or capital to build. Dividend portfolios require capital and patience; rental properties require upfront work and ongoing management; royalties require the initial creation.

For most people, the fastest path to meaningful passive income is a growing invested portfolio. Distributions and capital appreciation compound quietly without requiring new work.

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Frequently asked questions

Is dividend income truly passive?

Yes, once the portfolio is built. Reviewing holdings and rebalancing annually is minimal effort compared to a job.

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