Every now and then I stumble across a person, who thinks passive income means being paid for something you've done in the past. They think it's like interest payments; you don't have to do anything to collect it indefinitely. Such perception couldn't be father from the truth.

I would define passive income as income:

• that one receives irrespective of time and space constraints (One is free to do the work when he wants and wherever he wants.) AND
• for which there is no causal relationship between the hours spent working and income.

Still, one needs to do the work! If one stops working passive income will sooner or later dry up.