Source: IRS Statistics of Income, Table 1.4 (Tax Year 2023) (2023)
KEY TAKEAWAYS
- → 21.0% Share of all 160.6 million US individual tax returns for 2023 that reported any ordinary dividends. (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023)
- → $3,937 Average annual ordinary dividends on returns with under $100,000 of adjusted gross income that reported any dividends, about $328 a month. (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023)
- → 1.07% S&P 500 dividend yield at the end of October 2026, so $1,000 a month in index dividends takes roughly $1.1 million invested. (multpl.com (S&P 500 Dividend Yield), 2026)
- → 19.0% Share of US families holding stocks directly in 2025, down from 21.0% in 2022. (Federal Reserve, Survey of Consumer Finances 2025, 2025)
- → 4.3 million US tax returns that reported a net LOSS on rental property for 2023, against 4.9 million reporting net rental income. (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023)
- → 12% Share of full-time creators in Linktree's study of 9,500+ creators who earned more than $50,000 a year. (Linktree Creator Report, via Tubefilter, 2022)
Passive income is sold as something anyone can build with a weekend and a laptop. The tax data tells a different story. It shows passive income is real, it shows who collects it, and it shows that for most households the amounts are small enough to cover a phone bill rather than a mortgage.
This page uses the most authoritative numbers available instead of survey clickbait: every individual US tax return for the latest released year, from IRS Statistics of Income tables published in March, and the Federal Reserve’s Survey of Consumer Finances for 2025, released in October. The headline is stark. Tax returns with $1 million or more in adjusted gross income, about half a percent of all US returns, collected 40.7% of every dollar of ordinary dividends reported to the IRS for 2023. (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023)
The pattern holds across every kind of passive income the tax system can see. Dividends, rents and royalties flow overwhelmingly to people who already have capital, and the people who do not have it earn very little from them. That does not make passive income a myth. It makes it a capital question, and the sections below put a number on that question.
1 How Many People Actually Earn Passive Income From Dividends?
About one in five tax returns. Of 160.6 million returns for the latest tax year, 33.7 million reported ordinary dividends, 21.0% of the total. Below a hundred thousand dollars of income only 12.8% did, rising to 35.4% in the next bracket and 88.6% among millionaire returns. (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023)
| METRIC | VALUE | SOURCE |
|---|---|---|
| Individual tax returns filed | 160.6 million | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Returns reporting ordinary dividends | 33.7 million | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Share of all returns with dividends | 21.0% | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Returns under $100k AGI with dividends | 12.8% | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Returns $100k-$200k AGI with dividends | 35.4% | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Returns $1M+ AGI with dividends | 88.6% | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
Dividends are the cleanest test of passive income because they arrive with no work attached and every one of them is reported on a tax form. The tax data is not a survey people can exaggerate on; it is what brokers reported to the IRS and what filers wrote on their returns. On that measure, passive income is a minority experience, and the minority gets smaller the further down the income scale you go.
Most of the gap is ownership, not intent. Millions of households do own shares, but they own them inside retirement accounts, where dividends are reinvested and never show up as income on the return. That is a perfectly good way to build wealth. It is just not the monthly cash flow the passive-income pitch promises, and it is why the honest answer to how many people live on passive income is far lower than the number who invest. If you want income you can spend this month, the open-panel and research work in our breakdown of what survey and user testing sites really pay per hour is closer to what most people can start with.
2 How Much Money Do You Need to Make Passive Income From Stocks?
More than most people have. The S&P 500 yielded 1.07% at the end of October, so a thousand dollars a month from index dividends takes about a million dollars invested. The median family’s direct stock holding was $30,000, and median net worth was $215,900. (multpl.com (S&P 500 Dividend Yield), 2026)
| METRIC | VALUE | SOURCE |
|---|---|---|
| S&P 500 dividend yield, end of October | 1.07% | multpl.com (S&P 500 Dividend Yield) |
| S&P 500 historical median yield | 4.18% | multpl.com (S&P 500 Dividend Yield) |
| Families holding stocks in any form | 56% | Federal Reserve (SCF 2025 press release) |
| Families holding stocks directly | 19.0% | Federal Reserve, Survey of Consumer Finances 2025 |
| Median direct stock holding | $30,000 | Federal Reserve, Survey of Consumer Finances 2025 |
| Median stock holdings, all stockholders | $77,400 | Federal Reserve (SCF 2025 press release) |
| Median family net worth | $215,900 | Federal Reserve (SCF 2025 press release) |
Yield is the number the passive-income conversation skips. At today’s index yield, every thousand dollars invested pays roughly ten dollars a year in dividends. The index’s long-run median yield of 4.18% (multpl.com (S&P 500 Dividend Yield), 2026) is far higher, which is why older rules of thumb about living on dividends no longer translate: prices have risen much faster than payouts. High-yield funds and individual stocks can lift the figure, but they do it by taking on more risk, and a yield that looks too good often precedes a cut.
Set that against what families actually own. The Federal Reserve’s newest survey finds 56% of families hold stocks in some form (Federal Reserve (SCF 2025 press release), 2025), but only 19.0% hold them directly, and the median direct holding is $30,000 (Federal Reserve, Survey of Consumer Finances 2025, 2025). At today’s yield, that median portfolio produces a few hundred dollars a year. The typical stockholder’s total stock wealth of $77,400 is a meaningful retirement cushion and a very small income stream. None of this argues against investing; it argues against expecting investments to replace a paycheck before they are very large.
This is also why many of the fastest-growing “passive income” ideas are not passive at all. Selling digital products, running affiliate sites or reviewing products for commission all require ongoing work, which is why our ClickBank review treats affiliate income as a business with costs rather than as money that arrives on its own.
3 Is Rental Property Really Passive Income? Nearly Half of Landlords Report a Loss
For many owners, not on paper. For the latest tax year 4.9 million returns reported net rental income while 4.3 million reported a net rental loss, so 47% of rental filers showed a loss. Below a hundred thousand dollars of income, the average net rental and royalty income was $9,397. (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023)
| METRIC | VALUE | SOURCE |
|---|---|---|
| Returns with net rental income | 4.9 million | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Returns with a net rental loss | 4.3 million | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Rental filers reporting a loss | 47% | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Average net rental and royalty income, under $100k AGI | $9,397 | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Families owning other residential property | 13.8% | Federal Reserve, Survey of Consumer Finances 2025 |
| Median value of that property | $280,000 | Federal Reserve, Survey of Consumer Finances 2025 |
Rental property is the passive-income idea with the most real money behind it, and the tax data shows why it disappoints so many owners. A large part of those losses comes from depreciation, a deduction that lowers taxable income without any cash leaving the owner’s account, so a paper loss can sit alongside a property that pays its way. But depreciation does not explain everything: mortgage interest, repairs, vacancies and management fees are real cash, and they are why so many rental filers show little or nothing on the bottom line.
The entry price matters as much as the return. The Federal Reserve finds 13.8% of families own residential property beyond their main home, with a median value of $280,000 (Federal Reserve, Survey of Consumer Finances 2025, 2025). That is the capital most rental income sits on, and it is a figure that rules out the large majority of households before the first tenant signs anything. Those who do own rentals and earn under a hundred thousand dollars report net rental and royalty income averaging $9,397 a year (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023): useful, but not a salary, and a mean that is pulled upward by the larger portfolios.
4 Do Royalties and Content Creation Pay Passive Income?
Rarely at scale. Only 1.8 million returns reported net royalty income for the latest tax year. In Linktree’s study of 9,500 creators, 12% of full-time creators earned over fifty thousand dollars a year, while 68% of part-time creators earned under a thousand. (Linktree Creator Report, via Tubefilter, 2022)
| METRIC | VALUE | SOURCE |
|---|---|---|
| Returns with net royalty income | 1.8 million | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Creators in Linktree’s sample | 9,500 | Linktree Creator Report, via Tubefilter |
| Full-time creators earning over $50,000 | 12% | Linktree Creator Report, via Tubefilter |
| Part-time creators earning under $1,000 | 68% | Linktree Creator Report, via Tubefilter |
| Families with privately held business equity | 15.4% | Federal Reserve, Survey of Consumer Finances 2025 |
Royalties are the purest form of passive income, money for something made once and sold many times, and the tax system counts them separately from rents. The count is small: royalties appear on about one return in ninety (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023), and they include oil, gas and patent income as well as books and music, so the share of people living on creative royalties is smaller still.
Creator income is often filed under passive income because a video or template can keep earning after it is published. The Linktree figures, reported by Tubefilter from a study of more than nine thousand creators, point the other way: most part-time creators earn very little, and even among full-time creators only a small group clears a middle-class income (Linktree Creator Report, via Tubefilter, 2022). The data is from a platform study rather than a national survey and it is a few years old, so treat it as an order of magnitude. Earnings also depend on publishing constantly, which makes creator work closer to running a small business. The Federal Reserve finds 15.4% of families own a privately held business (Federal Reserve, Survey of Consumer Finances 2025, 2025), and very few of those businesses run themselves.
The same lesson shows up in the work-for-pay platforms we review. Writing and freelance marketplaces are sold with passive-sounding promises, and our Paid Online Writing Jobs review and Fiverr review both find the income scales with hours, not with time away from the desk.
5 What Should You Actually Expect From Passive Income?
A slow supplement funded by capital you already have. Households under a hundred thousand dollars of income that reported dividends averaged $3,937 a year, and returns above a million dollars collected 40.7% of all dividend dollars. Passive income grows with capital, not with effort. (IRS Statistics of Income, Table 1.4 (Tax Year 2023), 2023)
| METRIC | VALUE | SOURCE |
|---|---|---|
| Average dividends, returns under $100k AGI | $3,937 | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Share of all dividend dollars to $1M+ AGI returns | 40.7% | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| Returns reporting any dividends | 21.0% | IRS Statistics of Income, Table 1.4 (Tax Year 2023) |
| S&P 500 dividend yield, end of October | 1.07% | multpl.com (S&P 500 Dividend Yield) |
Put the four data sets together and a consistent picture appears. Passive income exists, it is reported, and it is heavily concentrated: the people with the most capital receive most of the dividends, most of the rental profit and most of the royalties. For everyone else, dividends average a few hundred dollars a month at best, nearly half of rental filers report a loss, and creator income behaves like a job. That is not a reason to give up on investing. It is a reason to stop judging yourself against screenshots on social media.
A realistic plan has two parts. The first is active income you can earn now, which is why this site focuses on what side hustles really pay: the fastest-paying options are covered in our guide to side hustles that pay daily, and higher-paid project work is covered in getting paid to train AI with no experience. The second is steady investing of part of that income, which is the only route the tax data shows actually producing passive income at scale. Platforms like those in our Prolific review will not make you passively rich, but they can fund the second part.
We built this page from tax and central-bank data rather than from vendor surveys for the reasons set out in how we review: numbers that someone is selling you are the least reliable numbers in this niche. When the IRS publishes its next tax year, this page will be updated with it.
Explore every figure in this article
Methodology
This analysis uses IRS Statistics of Income Table 1.4 for Tax Year 2023 (Publication 1304, released March 2026), covering all individual income tax returns; bracket shares and averages were calculated from that table by dividing the reported amounts by the number of returns reporting them, so averages are means among returns with the income type, not medians. Family-level holdings come from the Federal Reserve’s 2025 Survey of Consumer Finances (press release and bulletin, October 2026). The current S&P 500 dividend yield and its historical median come from multpl.com. Creator earnings come from Linktree’s 2022 creator study as reported by Tubefilter, a platform sample rather than a national survey, and are labelled as such. The IRS Excel table and the Federal Reserve PDF cannot be read by automated page checks, so every figure from them was read directly from the official files on the research date. IRS data counts tax returns, not people, and a joint return covers two spouses. No public dataset measures digital-product, course or affiliate income across the population, so those categories are discussed qualitatively.
- Sources consulted: 18
- Sources cited: 5
- Data freshness: current year: 4, last year: 0, older: 1
- Data range: 2022-04-20 to 2026-11-05
- Research date: 2026-11-05
- Update schedule: Annually, when IRS publishes the next Table 1.4
- Limitations: IRS figures are per tax return, not per person or household, and are the latest released (Tax Year 2023, published March 2026). Bracket shares and averages were calculated from the IRS table; averages are means and are pulled up by large accounts, and medians are not published at this grain. Rental losses include depreciation, a non-cash deduction. Survey of Consumer Finances 'other residential property' includes second homes, not only rentals. Creator income figures come from a 2022 platform study reported by Tubefilter, not a population survey. No public dataset measures digital-product, affiliate or course income across the population.
Frequently Asked Questions
How many people actually earn passive income?
About one in five. Of 160.6 million US tax returns for 2023, 21.0% reported any ordinary dividends and roughly 4% reported net rental or royalty income, per IRS Statistics of Income tables released in March 2026. Most of those amounts are small; the large ones are concentrated among high-income filers. (IRS Statistics of Income, 2023)
How much passive income does the average person make?
Less than the posts suggest. Among households under $100,000 of income that reported dividends for 2023, the average was $3,937 a year, about $328 a month, and only 12.8% of those households reported any dividends at all. Averages are pulled up by larger accounts, so the typical amount is lower. (IRS Statistics of Income, 2023)
How much money do I need to make $1,000 a month in passive income?
At the S&P 500's dividend yield of 1.07% at the end of October 2026, $1,000 a month from index dividends needs roughly $1.1 million invested. Higher-yield stocks or funds cut that figure but add risk; the index's historical median yield of 4.18% is far above today's level. (multpl.com, 2026)
Is rental property good passive income?
It is for some owners, but the tax data is sobering: for 2023, 4.3 million returns reported a net rental loss against 4.9 million reporting net rental income, so about 47% of rental filers showed a loss. Part of that is depreciation, a paper expense, but the cash still has to come from somewhere. (IRS Statistics of Income, 2023)
Do content creators make passive income?
Rarely at scale. In Linktree's study of more than 9,500 creators, only 12% of full-time creators earned more than $50,000 a year, and 68% of part-time creators earned under $1,000. Creator income also depends on constant output, which makes it closer to self-employment than to passive income. (Linktree Creator Report, via Tubefilter, 2022)
What share of Americans own stocks?
56% of US families held stocks directly or through retirement accounts and funds in 2025, down from 58% in 2022, per the Federal Reserve's Survey of Consumer Finances. Only 19.0% held stocks directly, with a median direct holding of $30,000, which yields about $321 a year at today's index yield. (Federal Reserve, 2025)
Sources & References
- IRS Statistics of Income, Table 1.4 (Tax Year 2023). “All Returns: Sources of Income, Adjustments, Deductions and Exemptions, and Tax Items, Tax Year 2023 (Publication 1304).” irs.gov/pub/irs-soi/23in14ar.xls. Accessed 2026-11-05.
- Federal Reserve (SCF 2025 press release). “Federal Reserve Board releases results of the 2025 Survey of Consumer Finances.” federalreserve.gov/newsevents/pressreleases/other20261009a.htm. Accessed 2026-11-05.
- Federal Reserve, Survey of Consumer Finances 2025. “Changes in U.S. Family Finances from 2022 to 2025.” federalreserve.gov/publications/files/scf26.pdf. Accessed 2026-11-05.
- multpl.com (S&P 500 Dividend Yield). “S&P 500 Dividend Yield.” multpl.com/s-p-500-dividend-yield. Accessed 2026-11-05.
- Linktree Creator Report, via Tubefilter. “200 million people are earning money from digital content creation, Linktree report finds.” tubefilter.com/2022/04/20/linktree-2022-creator-report-economy-statistics-link-i. Accessed 2026-11-05.
Last updated: