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In 2012, I walked away from my investment banking job with a $3 million net worth and roughly $80,000 per year in passive income. At 34, I had enough income to cover my basic living expenses in San Francisco. My friends thought I was crazy to leave such a lucrative job. But what they didn’t see was the work I had done behind the scenes for over a decade — quietly building multiple streams of income that didn’t depend on my time or labor. Since then, my passive income has given me the freedom to write on my personal finance blog, spend time raising my kids, travel to Hawaii regularly to reconnect with family, and invest in higher-risk opportunities that I never would have considered if I were dependent on a paycheck. Passive income is not truly passive at the start. Building the foundation takes time, effort, and strategy. Here are 10 of my all-time favorite passive income ideas. 1. Dividend stocks Best for: Long-term, low-maintenance investing Owning shares in companies that regularly pay dividends is one of the simplest and most reliable ways to earn passive income. But yields can be modest. With the S&P 500 dividend yield currently under 1.3%, you’d need more than $700,000 invested to generate $10,000 a year. Still, you can boost potential returns by focusing on Dividend Aristocrats — companies like Coca-Cola and McDonald's that have raised dividends for at least 25 consecutive years. Or invest through ETFs that offer diversification and low fees. 2. Treasuries and bonds Best for: Capital preservation and peace of mind With interest rates still elevated, U.S. Treasury bonds and high-grade corporate bonds now offer yields between 4% and 5%. That’s $400 to $500 per year for every $10,000 invested. They're low-risk, tax-efficient (Treasury income isn’t taxed at the state level), and perfect for investors who value stability. 3. Rental real estate Best for: Long-term wealth building Rental properties are one of the most effective ways to build wealth, especially if you start young. Rents can provide steady income, and property values often rise over time. The downside is that it's not truly passive. Maintenance, tenants, and property management all take work. But once the mortgage is paid off, the cash flow often becomes significant. 4. Private real estate platforms Best for: Hands-off real estate exposure If you want real estate income without the headaches of being a landlord, platforms like Fundrise let you invest smaller amounts into diversified property funds. They typically target returns of 7% to 12%, and many offer regular distributions. I use these platforms to diversify beyond my holdings in San Francisco, Honolulu, and Lake Tahoe. 5. REITs (Real Estate Investment Trusts) Best for: Liquid real estate exposure REITs are publicly traded companies that own and manage real estate. They’re required to distribute at least 90% of their income to shareholders, making them a popular source of passive income. The downside is volatility. REITs can swing more than the overall stock market, especially in downturns. But they offer true passivity, unlike direct ownership. 6. CDs and high-yield savings accounts Best for: Short-term goals and emergency funds Boring? Yes. Useful? Absolutely. With yields around 4%, certificates of deposit (CDs) offer guaranteed returns and are FDIC-insured up to $250,000 per depositor, per insured bank, per ownership category. They can be great for emergency funds or short-term cash needs. Just be aware of any early withdrawal penalty. 7. Digital products Best for: Creators and subject matter experts Creating something once and selling it many times electronically can provide for some high-margin passive income. That's why e-books, online courses, and software can generate income for years with minimal upkeep. An update every one or two years may be all that's needed. 8. Hard money lending Best for: Experienced lenders with extra capital Instead of earning around 4% in a savings account, you can lend directly to individuals and potentially earn 7% or more in interest. Borrowers pay higher rates because banks move too slowly or impose too many restrictions. These loans often fund things like small businesses, down payment bridges, or debt consolidation. To protect yourself, secure collateral (a car, equipment, or even a property lien) or use a legal promissory note. The biggest risk is trust. Misjudge someone's character and collections get messy. Worse, if the borrower is a friend or relative who doesn't repay, you could lose both your money and the relationship. 9. Royalties Best for: Writers, artists, and creators Royalties aren’t just for musicians and novelists anymore. You can license designs, images, software, or even blog content, and collect royalties whenever someone uses your work. When I published my book, the process took years. But now, those books continue to generate income long after launch. 10. Delayed passive income (growth investing) Best for: Long-term thinkers If you’re already earning and don’t need immediate income, investing in growth companies — public or private — can lead to much larger payoffs later. Think of it as planting fruit trees. You won’t get a harvest right away, but down the road, the returns can be substantial. For example, Apple didn’t pay dividends for decades, but long-term investors who held on earned huge gains. Today, I invest in public growth stocks and early-stage AI companies — knowing I can convert some of those gains into income-producing assets when I need to. Of course, you may want to seek financial advice best suited to your personal needs before making any decisions. But the beauty of passive income is that you don’t need a lot of money start. Begin with what fits your budget, interests, and risk tolerance. Over time, diversify into multiple streams so you’re not relying on just one. Sam Dogen is the founder of Financial Samurai and the author of "Millionaire Milestones: Simple Steps To Seven Figures," his latest book on building wealth in today's world. He also wrote the Wall Street Journal bestseller "Buy This, Not That." In 2012, Sam retired at 34 after working in investment banking for 13 years. He has been helping others achieve financial independence ever since. Want to level up your AI skills? Sign up for Smarter by CNBC Make It's new online course, How To Use AI To Communicate Better At Work. Get specific prompts to optimize emails, memos and presentations for tone, context and audience. 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