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Look, even Wikipedia admits it!
Passive income is a type of unearned income that is acquired with little to no labor to earn or maintain.
"I work very hard as a landlord"
"I am a leech on society"
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this post was submitted on 11 Jul 2024
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chapotraphouse
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Let's say I spend two years carefully hand-crafting 10,000 widgets, then decide not to make any more. I sell those widgets for $100 each, but will only sell one per day. Is the money I'm getting from widget sales passive income on your definition?
You say it like my definition is the weird and unconventional one. The term literally says "passive" income. The conventional definition is "you did something once and profit from it over time without putting any or very little effort".
In case of your weird and unnatural example, if the sale process is automated, and you can go do other work in the meantime or just sit in an arm chair and sip beer while watching TV, then yes, it's passive income.
Your example also implies that you had some other income to sustain you while you were working on these widgets and you shifted the income from what could've been active income to be passive income later.
In other words, you invested into these widgets and are now receiving dividends.
What I'm trying to tease out here is whether or not you think that passive income just means income for labor that is temporally separated from payment, which it seems like you do. That seems like not a particularly useful category of cases to talk about, at least to me. I don't really think there's much point in arguing about the "standard" definition, because it's a buzzword, not a precisely defined technical term.
The complaints on this thread are mostly treating "passive income" as a synonym for "rent seeking" (which is a rigorously defined technical term). Your definition includes things that aren't rent seeking, and just involve getting paid in the future for labor you did today. Again, I'm not saying your definition is wrong (because there's no precise definition to be wrong about), but it's talking past the other criticisms on this thread.