My 5 Current and 3 Future Passive Income Streams

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Recently, a reader reached out to share how his taxes were affected by his various passive income streams.

It turns out, to no surprise, that the taxes on those income sources are much lower than those levied on his earned income.

Although my passive income streams have grown steadily over the years, I haven’t put too much thought into their role in either my taxes or my standard of living until recently.

What changed? My active earned income dropped dramatically. Now that I don’t work a W-2 job, my cash flow situation and taxation look a lot different than they did before....

#1 Interest

Banks are not paying much in interest, but there are several online banks with a solid reputation paying 1% interest or more.

#2 Dividends

I’ve never been a big fan of dividends. When I wrote about the only individual stock I held, I highlighteded the fact that it pays no dividend and why that’s a good thing.

#3 Real Estate Investments

Swipe up to see the 4 types of real estate investments I have.  I've broken them up to give you details on each. 

#4 Other Websites

I hesitate to include these as passive income ideas, and I want to clarify right off the bat that I’m not talking about my own site, the one you’re reading now. The profit that comes in from my activities here at Physician on FIRE is definitely actively earned income (and I donate a lot of it).

#5 The 457(b)

Each year that I was eligible during my working career, I maxed out a non-governmental 457(b). I’ve got roughly seven years worth of contributions plus earnings in the account.

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