"What are some legitimate passive income ideas to supplement my current income?"

When you invest in a dividend-paying stock, the company is obligated to distribute a portion of its profits to its shareholders in the form of dividends.

This is a contractual obligation, and companies are required to maintain a minimum payout ratio to maintain their credit rating and attract investors.

(Source: Investopedia)

Real estate investment trusts (REITs) are required to distribute at least 90% of their taxable income to shareholders each year, which can include rental income, mortgage interest, and management fees.

This is a regulatory requirement to maintain their tax-exempt status.

(Source: IRS)

The concept of compound interest, which is the key to passive income growth, was first described by the ancient Greek philosopher Archimedes.

He discovered that the increased interest earned on an initial investment can lead to exponential growth over time.

(Source: Scientific American)

Peer-to-peer lending platforms, such as Lending Club and Prosper, use algorithms to evaluate borrowers' creditworthiness and determine interest rates for each loan.

These algorithms are designed to minimize default risk and maximize returns for investors.

(Source: Lending Club)

When you invest in an index fund or ETF, you are essentially buying a small piece of the entire market.

This diversification reduces risk and increases the potential for long-term returns.

(Source: Vanguard)

The concept of diversification is rooted in the theory of portfolio optimization, which was first described by the economist Harry Markowitz in the 1950s.

Markowitz showed that diversification can reduce risk and increase returns for investors by allocating resources across different asset classes.

(Source: Nobel Prize)

When you create digital products, such as ebooks and online courses, you are creating intellectual property that can be sold and distributed multiple times without additional production costs.

This is known as a "long tail" business model.

(Source: Chris Anderson)

Affiliate marketing programs, such as Amazon Associates, use cookie-based tracking to attribute sales to individual affiliates.

This allows affiliates to earn commissions on sales generated by their unique referral links.

(Source: Amazon)

The concept of passive income was first described by the ancient Greek philosopher Aristotle, who argued that individuals could increase their wealth through labor and investment.

(Source: Aristotle's Nicomachean Ethics)

The tax implications of passive income are complex and dependent on individual circumstances.

For example, the IRS treats dividend income as ordinary income, while capital gains from the sale of shares are subject to a lower tax rate.

(Source: IRS)

The concept of moats, which is favored by investors such as Warren Buffett, refers to the competitive advantages that companies can create to protect their market share and maintain profitability.

This can include brand recognition, patent protection, or economies of scale.

(Source: Buffett's shareholder letter)

The concept of passive income was popularized by the 1920s investor and philanthropist Andrew Carnegie, who advocated for the importance of investing in dividend-paying stocks and real estate.

(Source: Carnegie's "The Gospel of Wealth")