Passive Income Streams - What are they and how can you get them?

It sounds fantastic, doesn't it? The very idea of a stream of income that is passive is incredibly attractive and seductive to any thinking person. But just what does passive income really mean? Definitioins of the term "Passive income" on the Web vary, but my personal favourite is found at Wikipedia (http://en.wikipedia.org/wiki/ Passive_income) which seems to cover most bases.

One obvious example of passive income is the interest accrued by a savings account. This is all very well while you have savings in place, but the problem with this kind of income is that it is residual, meaning that in order to maintain the income stream, only the residual part can be used. If you fall upon hard times or the interest rate drops dramatically you might have to start spending your lump sum, then of course the passive income disappears along with your savings. Not an ideal situation and it demonstrates the fragility of residual income.

The best kind of passive income then is continuous and does not rely on a lump sum. Once the wheels have been set in motion then no further action is required for the income to be generated, or as the Wikipedia definition states; "without continuing effort" - Quite simply, it happens all by itself! Sounds good to me, but how is that kind of passive income model created?

There are a number of ways, but probably the most well known are royalty payments earned for creating popular songs or best-selling books. We've all heard of the massive royalty cheques received by songwriters and top authors. But hang on a minute; does that mean you have to write a hit record or a bestselling novel in order to generate passive income? Well, if you have the talent, along with the patience and perhaps a bit of luck on your side, then by all means go for it. However, most of us fall short of one or more of the required criteria, and the number of people earning a living through this kind of passive income alone are in the minority.

One thing that cannot be overlooked is work. Don't be fooled into thinking that just because your time is not directly traded for cash that no work is required on your part. In most cases a great deal of time and effort has to be expended before even the smallest amount of passive income is realised, and this kind of 'up front' work without any obvious instant rewards will put many off before they even get started, after all; who wants to spend their

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