In America, one could say that the hard part is getting to the point at which the assets of a given individual or family are enough that the passive income generated from such is pretty much good enough to live a good life without necessitating any additional labor, though any additional labor so accomplished would undoubtedly help to increase those assets to an even higher number.
How much money a given individual or family needs to feel secure that all is well is going to be dependent upon that family and their circumstances. Still, if we were to take a number such as two million dollars, it should be recognized that the way that our tax system currently works is that passive income, such as that generated through capital gains, dividends, CDs, bonds, equities, and the like are typically taxed at a very favorable rate, so that someone who has two million dollars and has a return of 6% per annum is the same that will have income of $120,000 of which, that income may be taxed very lightly or not at all, depending upon what those investments are and if they have been sold. In other words, in America, for a certainty, money makes money, and because money makes money, those who have it have placed themselves in the pole position to live a good and easy life, in the sure knowledge that they, in essence, don’t need to do a darn thing to continue with enjoying that good life.
It has to be recognized that when we talk of passive income, it really is passive, in the sense that investing in a CD, a bond, or equities takes just a few minutes, and no further action is really required on the party that has made that investment. This signifies that passive income in many a case, really necessities no significant labor on the part of the individual so making that investment, which is not the same thing, as someone that is required to work forty hours a week or even more, and also has their income subject to not just Social Security and Medicare taxes, but also are responsible for Federal and State taxes, as well. In other words, in this nation, there are plenty of people that make money by simply putting that money to work, and there are literally millions of others, that have to work, in the hope of having enough to simply pay their bills, and with no real expectation that there will ever come that time when they will have so much money that they can make money from that and to labor no more.
Perhaps all of this seems fair and that is the way that it should be, but in actuality, the fact that there is a significant subset of Americans that can just inherit money and thus not work a day in their lives, seems to be not in keeping with what America is all about, in which the answer to this issue is probably to see that passive income, is taxed at a higher rate, and has less avenues to shield that income from being taxed, and finally we really ought to have those that make money from passive income to see that they pay their appropriate dues to that nation which created the pathway to such success to begin with.