Learn
The Passive Income Course
Six short lessons on how passive income is actually produced — who pays it, what the payment legally is, what it costs to collect, how it is taxed in the US, and how it stops. Free, no account, and a self-marking quiz at the end.
Passive income has a marketing problem: it is usually sold as a list of products rather than explained as a set of mechanisms. This course does the opposite. It ignores products almost entirely and works through the six ways money can reach you without you doing the work each time it arrives.
The framing. Every passive-income stream on this site pays through one of six mechanisms: you lend money and receive interest; you own a slice of a business or fund and receive distributions; you own an asset and receive rent for someone else's use of it; you own rights and receive royalties each time they are used; you sell someone a right and keep the option premium; or you own an operating company someone else runs and receive a share of its profits. Learn the six and the whole field organises itself: a REIT, a triple-net lease and a farmland fund stop being three products and become one mechanism wearing three wrappers, each with its own costs, taxes and ways of failing.
A mechanism is how the money reaches you; a product is the wrapper it arrives in. A REIT, a rented house and a farmland fund are three wrappers around one mechanism — rent. The wrapper changes the costs, the tax treatment, the liquidity and the ways it can fail. It does not change where the money comes from, which is why the mechanism is the thing worth learning first.
Who it is for. Someone who can read a yield but has never had the plumbing explained. No prior finance course is assumed and the only maths is arithmetic. It is written for a US reader on tax and regulation, and says so wherever that matters.
The six mechanisms
One lesson each. The library link beside each mechanism opens every income type that pays through it.
-
Interest from lending
You lend money and are paid interest for the use of it. Bank deposits, certificates of deposit, Treasuries, corporate and municipal bonds, bond funds, private notes.
-
Distributions from ownership
You own part of a business or fund and receive a share of what it earns. Dividend stocks, preferred shares, REITs, BDCs, MLPs, closed-end funds.
-
Rent and lease payments
You own an asset and are paid for someone else's use of it. Housing, commercial property, ground leases, farmland, storage, billboards, towers.
-
Royalties and licensing
You own rights and are paid each time they are used. Music, books, film, patents, trademarks, software, minerals and oil and gas interests.
-
Option premiums
You sell someone the right to buy or sell at a set price and keep the payment for it. Covered calls, cash-secured puts, and the funds built on them.
-
Business profits
You own an operating company that someone else runs. Silent partnerships, limited partnerships, franchises with hired management, private funds.
The lessons
Read them in order if you can — the later lessons borrow vocabulary from the earlier ones.
Every lesson asks the same questions of one mechanism: who pays, why they are paying, what the payment legally is, what it costs to collect, how it is taxed in the US, and how it stops. That repetition is the point — by the third lesson you are comparing answers rather than learning a new vocabulary each time. Nothing is locked, nothing is tracked, and the quiz at the end marks itself in your browser.
1. The six ways money reaches you
Every passive-income stream on earth — an insured savings account, a warehouse, a song, a private lending fund — pays through one of six mechanisms. Learn the six and every product you meet afterwards sorts itself.
Read →2. Interest: what you are paid for lending
From an insured deposit through Treasuries, corporate bonds and private notes, interest is priced the same way — and every extra point of it is payment for accepting something worse.
Read →3. Distributions: being paid for owning
Dividends and fund distributions arrive looking identical on a statement and come from completely different places. Where the cash originates is what decides whether it can continue.
Read →4. Rent: being paid for the use of an asset
Rent is the oldest income there is and the one most often quoted at the wrong number. What reaches you is whatever survives the expenses, the debt and the empty months.
Read →5. Royalties: being paid per use
A royalty pays when somebody uses something you hold the rights to. The rate is the easy part; the base, the deductions and the decline curve are where the money actually is.
Read →6. Option premium: being paid to give someone a choice
An option seller is paid immediately for accepting an obligation later. The premium is real cash — and it is not interest, it is not a yield, and it is the smallest number in the trade.
Read →7. Business profits: being paid by a company someone else runs
Owning part of an operating business is the widest and least standardised income mechanism, the one where the document matters more than the market — and the one that ends this course on what 'passive' actually means.
Read →What the course deliberately does not do
- It does not rank income types, name a best one, or suggest an allocation.
- It does not quote a rate as a fact of the course. Live numbers live on the section pages, stamped with the date they were pulled.
- It does not estimate what you could earn. Where arithmetic helps, the calculators run it on numbers you type.
- It is not tax or legal advice. US treatment is described in general terms and changes.