Which is a form of passive income? (1 point)
• owning rental property
• teaching golf
• wages from a part-time job
• trading stocks
owning rental property
Owning rental property is a form of passive income.
To determine which of these options is a form of passive income, we need to understand what passive income actually means. Passive income refers to earnings that require minimal effort and time investment once the initial work is done. It allows individuals to generate income without actively working for it on a regular basis.
Now, let's evaluate each option to see if it qualifies as passive income:
1. Owning rental property: This option can be considered passive income if you hire a property management company to handle tenant management, maintenance, and other tasks. After setting up the property, you can earn consistent rental income while having minimal involvement in day-to-day operations.
2. Teaching golf: Teaching golf is an active form of income as it requires your direct involvement and time. It is not typically categorized as passive income.
3. Wages from a part-time job: Part-time jobs involve active work, where your income is directly linked to the number of hours worked. Hence, this option does not qualify as passive income.
4. Trading stocks: Trading stocks can be considered a form of passive income to some extent. While it does require initial research and active decision-making, certain investment strategies like long-term investing or dividend investing can generate passive income over time as you earn dividends or capital gains without actively trading.
Considering the explanations provided, the option that most closely aligns with passive income is:
• Owning rental property
It's important to note that tax laws and regulations can vary, so seeking advice from a financial professional or tax advisor is recommended when considering passive income options.