If you have just a little bit of money to start with:

– selling digital goods

• graphics on istockphoto
• iphone/ipad apps (Can an iOS app be a good source of passive income?
• software- setting up a website with ads

– writing a good book or ebook

If you have a lot of money / connections to start with

– owning a patent
– owning a property and collecting rent
– investing and getting a return
– Buying someone else’s royalty / license income stream
– An “override”, revenue share, or whatever you call a perpetual or long term stream defined as a cut of gross or profits, in exchange for setting up a deal

If you are just damn lucky

– Beneficiary of a trust
– Royalty in anything – an invention, mineral rights, a song catalog
– You manage to figure out a way to do drop shipping (I spent 2 years trying to find a drop shipper.  I feel as this is a very difficult thing to pull off)