# Passive Income

*Everyday Money — Finicade finance glossary*

Passive income is money that keeps arriving without your ongoing labour — dividends, bond coupons, rent, royalties, interest. The honest version of the idea is that it takes capital or upfront work: $500 a month of dividends at a 3.5% yield needs roughly $170,000 invested. The dishonest version, heavily marketed online, treats a business that requires daily management as 'passive'. Tax authorities have their own narrower definition, which matters because passive losses often can't offset active income.

**Also known as:** income streams, residual income

**Related terms:** [Dividend](https://finicade.com/glossary/dividend), [Rental Yield](https://finicade.com/glossary/rental-yield), [FIRE (Financial Independence, Retire Early)](https://finicade.com/glossary/fire), [Cash Flow](https://finicade.com/glossary/cash-flow), [Interest Rate](https://finicade.com/glossary/interest-rate)

Source: https://finicade.com/glossary/passive-income