Passive income is about producing income from a source other than an employer or contractor. The Internal Revenue Service (IRS) identifies passive income as stemming from either rental property or a non-participatory business or investment such as book royalties or stock dividends.
But passive does not mean that investors just set it and forget it. Investors still have to monitor dividend stocks on a regular basis to make sure they are still performing well and make decisions to buy, sell or hold. This has been a terrible year for the prices of real estate investment trust (REIT) stocks, but most of them have not cut their dividends so far and remain great passive-income providers.
