The Truth About Passive Income: What You Need to Know to Succeed

ByJohn Dawson

Passive income is one of the most appealing ideas in personal finance. But how much of the promise is real, and how much is hype? Can you actually build passive income with blogging in 2025, and if so, what does it take?

In this post, we’ll break down the reality behind the concept, supported by key statistics.

At a glance:

  • Types of passive income range from investments to digital products to affiliate marketing.
  • The appeal lies in earning money while you sleep: freedom from trading time for dollars.
  • The reality is that most “passive” systems require upfront effort, time, or capital.
  • Blogging in 2025 can still deliver passive income, but only with consistent content, audience growth, and smart monetization.

By the end, you’ll know what’s myth, what’s real, and how to put yourself on the path to sustainable income.

A clock sitting on a pile of gold coins. In the background, we can see the sun rising on the business district of a cosmopolitan cityscape.

“If you don’t find a way to make money while you sleep, you will work until you die.”

Warren Buffett

Why Is Passive Income So Attractive?

Different Types of Passive Income

Everyone Wants a Piece of the Pie

Can You Really Succeed — And If So, How?

Passive Income FAQ

Why Is Passive Income So Attractive?

It’s often described as the “holy grail” of financial freedom, and for good reason. With passive income, money keeps coming in whether you’re working or not.

A comfortable situation that offers a sense of security, and above all, the enviable opportunity to build your life around your own goals, with full independence, rather than around a fixed office schedule. Especially since many people are unhappy in their jobs and see this approach as a way to free themselves from it.

Thus, rather than constantly trading time for money, passive income (at least in theory) relies on a system where your past efforts, investments, or creations continue to generate value on their own. Which means you could earn more without doing more.

For example, if you run a blog, passive income comes from monetizing content you’ve already created, through methods such as:

• Advertising

Selling ad space on your blog via platforms like Google AdSense is one of the simplest ways to earn passive income, but results are modest unless you have substantial traffic. Ads can also annoy readers and affect the personality of your blog.

• Affiliate Marketing

Promoting products or services through affiliate links can be one of the smartest ways for new bloggers to start earning commissions while growing their audience. But once again, without substantial traffic, the income will remain negligible.

• Selling Digital Products

Includes eBooks, online courses, templates, and stock photos or music. This option requires upfront effort but can generate ongoing revenue with minimal maintenance. However, it’s most effective when you already have an audience and an email list. Plus, many markets are already crowded (like stock image sales) and without visibility or recognition, it’s difficult to sell a course, no matter how good it is.

This refers to articles, posts, or other material that a brand or company pays the blogger to publish, often promoting a product, service, or idea. But unless you’re a celebrity or have built a sizable, engaged audience, it’s unlikely that sponsors will come knocking. In most cases, sponsored deals are negotiated once your platform has gained real traction.

• Subscription models

A subscription model for blogs is a monetization strategy where readers pay a recurring fee to access premium content, special features, or exclusive community benefits. When implemented successfully, it creates a more stable and predictable income stream by offering added value beyond the blog’s free content.

Different Types of Passive Income

Passive income can be categorized into different streams, including:

• Investment Income

Earnings from investments like dividends from stocks, interest from bonds, or real estate investment trusts (REITs). Stocks can be volatile, and dividend investing is a long-term strategy (typically 10+ years). This type of investment requires a “buy and hold” mindset: invest today, benefit later.

A set of keys hanging from the lock of an open door, suggesting the ownership of a house.

Ninety percent of all millionaires become so through owning real estate.

Andrew Carnegie

• Rental Income

Money earned from renting out property, equipment, or other assets. As mentioned earlier, rental income isn’t always passive: maintenance, property management, and tenant turnover require work.

• Royalty Income

Payments for intellectual property like books, music, patents, or licensed images. A great option if you can make it happen, but highly competitive and unpredictable.

• Digital Products

From printable planners to niche-specific online courses, digital products come in many forms, and once created, they can be sold again and again. it’s important to offer something useful, well-packaged, and easy to deliver automatically. One of the biggest advantages is scalability: whether you sell one or 1,000 copies, the cost stays the same. For creators looking to build income beyond client work or freelancing, it’s a powerful model… if you can drive traffic.

Everyone Wants a Piece of the Pie

A 40-year-old man sitting in a lounge chair, wearing sunglasses, a shirt, and shorts, typing on his laptop while gazing at a tropical beach in the background, suggesting he is wealthy and working from a paradise location.

Key statistics

A study by Louisa Zhou on side hustles found that:

  • In 2024 in the US, 46% of individuals started a side hustle to earn passive income.
  • 50% of millennials have a side hustle, compared to 70% of Gen Zs. Younger generations are driving the trend.
  • The average side hustle income is $685 per month, with less than 5% making over $10,000 per month.
  • People who dedicate at least 12 hours per week to their side hustle earn a median of $1,122 per month.
  • 2 out of 3 full-time independent workers believe they have more security than traditional employees.
  • Most people work on side hustles in the evening or on weekends, and almost half of side hustlers sacrifice time with friends and family.

This data shows that more and more people are pursuing this path, which means competition is growing too. Nearly half of these independent workers earn very little (around $500 per month). If you want to earn more, you’ll need to dedicate at least ten hours a week to it.

As a result, a side project will inevitably put pressure on your personal life. If you’re thinking about getting started while keeping your job, be prepared: this kind of activity can eat up a large portion of your free time.

Can You Really Succeed? And If So, How?

While passive income sounds great, the reality is:

• It Requires an Initial Effort

Setting up sources of passive income takes time. In the case of a blog, you need to create content (this can mean many months or even years of unpaid work), generate traffic through various strategies (which also require a significant investment of time and effort), and sometimes invest money upfront.

Detail showing the corner of a desktop computer, with a screen and a keyboard, and a hand holding a mouse.

• Some Streams Require Maintenance

Rental properties? Need management. Digital products? Need updates. Affiliate marketing? Needs constant traffic.

• Not Everyone Succeeds

Market trends and evolution, skills, instinct, talent, effort, persistence, and luck all play a role. This isn’t a get-rich-quick system. It’s a long-term investment, with no guarantees.

No matter the field you choose to pursue: stock market investing, real estate, or creating online content, building passive income will be a long and difficult process. For the vast majority of people, the promise of fast, easy, recurring income is just a myth. Every sector is highly competitive and demands sharp professional skills. If you’re just starting out, expect to spend at least a few months learning and experimenting.

That said, with the right effort and knowledge, passive income is still within reach for most people. For someone who enjoys creating online content, for instance, it’s an opportunity to turn their passion into profit, while keeping full creative control. Most successful bloggers started small. Their secret? Stick to the plan. Stay consistent. And keep building. Over time, a blog can become a real way to earn a living.

🎧

Prefer to listen? This topic is also explored in one of my podcast episodes:

Passive Income FAQ

Passive income is money earned without ongoing active effort. Unlike a traditional job, where you’re paid for your time, passive income comes from systems or assets that continue to generate value after the initial work is done, like royalties, ad revenue, or automated sales.

The “set it and forget it” idea is mostly a myth. While some income streams can become low-maintenance over time, nearly all forms of passive income require upfront effort, and often some ongoing optimization. Think of it as “front-loaded” work, not zero work.

Examples include:
• Creating a blog or YouTube channel that earns through ads or affiliate links
• Designing digital products (like eBooks or templates) and selling them online
• Licensing stock photos or illustrations
• Investing in dividend-paying assets (if you have capital to start with)
It’s important to start with something you can build over time, using your existing skills.

It depends on the method, but most people see slow growth at first. For a content-based strategy (like blogging), it can take 3–12 months to see meaningful results. The curve is usually steep at the start, then flattens into a trickle that can grow.

Most people can create some form of passive income, but it helps to have either time, skills, or capital (ideally two out of three). The internet has lowered the barrier to entry, but success still requires consistency, creativity, and a bit of trial and error.

Sources:

  • Louisa Zhou, “2025 Side Hustle Statistics: Who’s Earning What and Why,” LuisaZhou.com, 2025.
  • Investopedia, “What Is Passive Income?” https://www.investopedia.com/terms/p/passiveincome.asp
  • Forbes, “Passive Income Ideas: 10 Strategies to Earn Money in 2024.” (source no longer online, please refer to this one)
  • Shopify Blog, “27 Passive Income Ideas for 2024.” (source no longer online, please refer to this one)
  • Pew Research Center, “Gig Work, Online Selling and Home Sharing,” 2022. (source no longer online, please refer to this one)
Portrait of John Dawson over a blue stippled background.

Great to have you here! Feel free to leave your thoughts in the comments.

Hi, I’m John Dawson, the creator of DawsonDecoded. Whether you’re here to start a blog, explore new ways to earn online, or rethink your career path, I hope you’ll find something useful, and maybe even inspiring.

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