The first time I understood the ideal of having a passive income was in Malaysia. It was during a huge (or so I had thought) bike trip up Australia and around much of Asia. We had arrived in a small town just south of the Thai border when we met another bike tourer from the UK named Nigel.
He was telling us his story, and he had been on the road for 3 years. Just taking his time from country to country. He'd ridden from London to Australia, and was now making his way back to that part of the world via a different route.
Bike touring can be a very cheap way to travel. There's little cost of transportation (other than the initial cost of buying the bike and equipment), and you can often find somewhere to camp. In fact my friend and I while traveling through Australia, managed not to pay for a single nights accomodation in about 6 months! We rode from Sydney, up the East Coast to Innisfail, and across the Gulf of Carpentaria up to Darwin, camping and on the odd occasion were invited to stay with some friendly locals.
Anyway, my first thoughts after meeting Nigel were how he could continue cycling for so long without working. My friend and I had saved up money, and also did some work picking fruit. It turned out he had worked hard for 10 years or so and had paid off an apartment in London. An agency dealt with the rent and the tenant and took their fees, Nigel recieved the rest.
Living in Sydney, London or where I'm based now in Shanghai this rent money probably wouldn't amount to much. But with him travelling on the bike, it was more than enough to continue travelling this way as long as he liked.
Since my trip, this ideal has kind of stuck with me. Not to be rich or buy the latest products or anything like that. Just to have this thing working in the background that I don't need to think or worry about, that is earning enough to live frugally. You know, enough to pay rent, eat, and replace old or broken things every so often. Perhaps enen enough to share with your local community or give some away to charity.
The main thing is that all the time is yours! Time is more precious than money anyway right? What a great thing it could be if I could just spend my time creating music and art, or whatever I felt like. This is an ideal I hope someday, perhaps through a universal income or something along those lines, people are able to pursue their ambitions without worrying about paying the bills.