Which statement best describes a characteristic of passive income streams?

• A. Generated with minimal ongoing effort after setup
• B. Generated with substantial ongoing effort after initial setup
• C. Requires daily manual transactions
• D. Only comes from selling physical goods

Answer: (A)

Passive income is earnings that continue after you’ve done the initial work, with minimal ongoing effort. The statement matches this idea: once the setup is complete, the income flows in with little day-to-day activity, often through systems or assets you’ve put in place. Examples include rental income after leases are secured, royalties from creative work, dividends from investments, or a digital product that keeps selling with automated delivery.

The other options don’t fit because they describe more active or ongoing effort: substantial ongoing work after setup suggests an active rather than passive model; daily manual transactions imply constant hands-on activity; and income from selling physical goods isn’t inherently passive and typically requires ongoing fulfillment and sales efforts.