At the same time, there are deeper layers to the concept of passive income that weren’t mentioned.

Different Levels

I think you would agree that some types of income are more passive than others. The income you produce from the interest on a money market account is much more passive than the income you produce from your network marketing business (plus it didn’t take forever to set up).

So it’s not quite as black and white as this article portrays. Income is not simply passive or not passive. It exists on a continuum between completely passive and completely active. While no income is completely passive. Income from money market accounts and treasury bonds are pretty darn close, even if you have to check the paper every once in awhile.

Working Capital

So, the deeper issue is created from the fact that: the more money you have, the more passive your investments can be.

Most people are trying to make passive income out of nothing and are running into this problem.

For example, single-family real estate investing is certainly more passive than a job, but not as passive as multi-family investing; but multi-family investing takes more money to get into.

“…We are however talking about working less for a greater financial reward… I would call that Lean! It is not passive but it is obtaining the greatest return on invested effort regardless of the industry, business or job.”

Spot on!

Having said that, this economy will drastically change between now and my retirement. Nothing is certain, so even those looking to build passive income would be smart to continually find ways to develop future revenue streams.

I like the idea of quantifying exactly how ‘passive’ an income stream is. It wouldn’t measure the margin of a widget, but it would help to measure how ‘hands-off’ you can be with a particular investment. Interesting idea that would help to identify some of the risks of investments that we often don’t think about before jumping into it.
Jason @ MyMoneyMinute´s last blog ..Tax Refunds: Does Size Matter?

I think I feel better when I earn ’sweat equity’ income. Something where I’ve really given my all and put in time, effort, and creativity. That’s not to say that earned income through little work is bad. But even if I earned more that way, I don’t think I’d be happy unless I was creating something valuable and working hard at it consistently.
Jeremy Johnson´s last blog ..An Introduction To Jeremy’s “Wizard Club”

But again, I see the “degree” argument as something separate from size. For example, you could have three small income streams that are very passive, like three savings accounts, and one large stream that is not so passive, like a property you manage on daily basis. To me, the “degree” concept just assigns a level to the type of stream you’re dealing with.

Also, you could have a property that is 2 units, or 100 units…but both could be equal on the degree scale if you spend the same amount of time managing them both.

But as you point out, the degree of “passiveness” does not imply the effectiveness of your income stream. Just how much time you can expect to spend on it…

That’s my 2 cents!
Wojciech Kulicki´s last blog ..Get a Second Job and Quit Whining About Debt

It’s actually not very fun being on top. The REAL fun is progress, and seeing yourself gain by leaps and bounds. This is part of the essence of the Yakezie Challenge.

There’s a book called “Dance With Chance”, which talks about the illusion of control. Fascinating read. If you have time, check it out.
Financial Samurai´s last blog ..The Government Is Sexist And Nobody Seems To Care

So what can be passive – Total inheritance? Winning the lottery?

We are however talking about working less for a greater financial reward… I would call that Lean! It is not passive but it is obtaining the greatest return on invested effort regardless of the industry, business or job.
LeanLifeCoach´s last blog ..Combat The Closing Techniques – The Puppy Dog Close