how can you generate passive income?


Answer: Compared with active income which you earn in exchange of your time and efforts, passive income comes passively as you can sit aside after proper initial setups. Some argue that time-average investing in index funds is considered passive investing. Time-average-investing or dollar cost averaging investing means you invest a fixed amount in the index fund recurringly with a given frequency, usually monthly or biweekly, regardless of the fund price. You can set it up with auto-payment or auto-investment through your brokerage and let it build your wealth over time. Index funds mirror the performance of a collection of selected stocks, thus providing a diversified strategy by its nature. SP500 index has a proven performance record that beats most active fund managers. In addition, real estate investment is somehow passive if you leave all the property management to professionals. However, the fact that it requires a certain amount of equity to get started makes younger investors shy away from it. For the younger generation, generating passive income from content they publish on social media has become a popular choice. For example, publishing videos to your YouTube channel requires time and effort to create the content. But once the video is live, it starts to generate income streams with more and more people watching your videos for years to come.