Passive income is somewhat of a misnomer. It usually isn’t a completely passive source of money.
You do need to invest time and energy in setting it up initially. Plus, there will be some ongoing maintenance, care, and feeding to keep the revenue stream going.
However, it is pretty amazing compared to selling your time for money, which is what most of us do with a 9-5 job. A regular job does not scale. There is only one of you, and there are only 24 hours in a day.
One way that many people generate passive income is through investments. Essentially, you're putting your money to work for you. If you choose your investments well, you get much more out than you put in. Some examples:
However, you can also build passive sources of income through your creative talent, knowledge, and skills. The online and digital world has turned this into an infinitely scalable business. Some examples: