Some workers have been mandated back to the office after settling into work-from-home life, while others are finding that cubicle life and working 9-to-5 isn’t for them. Perhaps that’s why the idea of earning passive income has such allure.
And some Americans are making big money — passively. Greg Keogh, in his 30s, told (1) The Wall Street Journal that he got into the world of passive income because he couldn’t stand commuting and dressing in office attire.
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After talking to a dog owner, he was inspired to invent a larger-than-normal lint roller for pets, which he now sells on Amazon. He’s been at it seven years, making about $50,000 to $115,000 a year — and he only spends about two hours a month doing it.
Now Keogh can spend his days doing what he wants, while still making a steady stream of income. “That is the ultimate power,” he told WSJ.
But it doesn’t mean you should quit your day job just yet. In fact, for many Americans, passive income or side hustle money serves as a complement to a day job or a bridge to self-employment.
Passive income versus side hustles
Passive income generates earnings with minimal work after you make an upfront investment in time and/or money. For example, Keogh invented something that people want to buy, creating a passive income source.
You can earn passive income through investing (say, in stocks or real estate), garnering royalties on intellectual property, creating digital products that can be sold repeatedly (such as an online course) or through affiliate marketing, where you earn a commission when you promote other people’s products.
A common way to earn passive income is through renting out your home or car through online platforms such as Airbnb and Turo.
A side hustle, on the other hand, typically requires putting in the hours, whether you’re freelancing or driving for a rideshare service. It’s also not scalable. After all, if you’re a rideshare driver, you can’t drive 24 hours a day, so there’s a cap on what you can earn.
Passive income streams can scale, but you typically have to put in some effort upfront. And you typically need some sort of expertise to set yourself apart in a crowded marketplace.
So, if you’re developing an online course, you’re more likely to be successful if you’re a subject matter expert in the course material. In Keogh’s case, he’s a mechanical engineer by trade, which helped him develop his lint-roller business.
Some side hustles could turn into passive income over time. If you freelance as a technical writer, for example, you could eventually create courses in your area of expertise.
State of the workplace
Part of the appeal of passive income streams could be related to the current state of the workforce, with one in four (24%) workers saying they’re struggling or burnt out in their current job, according to the USA TODAY/SurveyMonkey Workforce Survey 2026 (2).
And almost one in three (31%) workers say they’re “coasting” in their job. Younger generations are more likely to work “for the paycheck” than because they’re inspired by their work (38% of Gen Z and Millennials combined vs. 26% of Gen Xers).
So it may come as no surprise that more than a quarter (28%) of Americans currently have a side hustle, according to Omnisend’s Side Hustle Economy Report 2026 (3).
But it’s not always lucrative: About half (51%) of Americans earn up to $500 per month from their side hustle, while 33% earn $1,000 or more. Most (86%) spend less than 20 hours a week on it (typically five to nine hours).
“Inflation may have cooled on paper, but everyday expenses remain stubbornly high,” says Marty Bauer, Omnisend’s senior ecommerce expert, in the report. And an extra few hundred bucks can help lower that pressure, “making even low-earning side hustles feel worthwhile.”
Selling products online is the most popular side hustle in the U.S., at 27.5%. Other methods of side hustle money include content creation (15.7%), reselling items online (13.4%) and online tutoring (9.8%), according to the report (3).
How to budget with passive income or a side hustle
You might not want to quit your day job until your side hustle starts to provide a steady income stream — passive or not.
When you don’t know how much you have coming in each month, it’s harder to budget — not just for everyday expenses, but for debt repayment, investments and retirement savings. Or you may end up having to borrow money to make ends meet during lulls.
If your venture starts to pay off, you could consider dropping to part-time hours at your day job if you still want to have a financial safety net. You may also want to budget your passive income or side hustle money just as you would with a steady paycheck.
For example, start building an emergency fund that can cover three to six months of living expenses. This can help if you experience a lull in your side hustle. Also budget some of that money for paying down debt, investing and savings.
If you still have a day job, you could use your passive income or side hustle money to pay for daily expenses to maximize your workplace retirement savings plan, especially if your employer matches your contributions.
If you leave your day job, make sure you’re bringing in enough money to meet your retirement savings goals and to cover your health insurance costs.
And don’t forget about taxes. Since taxes aren’t automatically deducted from passive income streams or side hustle money, you’ll need to report that income and put enough aside to cover your tax bill.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see ourethics and guidelines.
The Wall Street Journal (1); SurveyMonkey (2); Omnisend (3)
