The term passive income will sound instantly attractive to anyone. But you should understand that passive income is possible only by taking some action. If you do some work in the beginning, you can earn income for a long time without much additional efforts. This is the meaning of passive income. There are several ways by which you can set up a money making system and reap the benefits over a long time. Some of the most promising ones are: 

1) Network Marketing: Is a popular way of making money online. You have to join a network by paying a subscription and then build a downline. Once you recruit a few people, they, in turn, will recruit more people and you will see your income multiplying very fast. After sometime, you will start receiving monthly checks for substantial amounts without any work on your part. You will get a taste of real passive income! While this business model is very attractive, this has two drawbacks. There is an upfront cost by way of subscription. Secondly, building up a downline could be a herculean task if you are not an experienced internet marker. 

2) Affiliate Commissions: Becoming an affiliate of a company is the most sought after way to make money on the net mainly for the reason that you can start this business with zero investment. You can become an affiliate of Amazon, Clickbank, Commission Junction etc. and start promoting their products. Once you set up a system to market your product either through paid methods like creating a website or through free methods like creating a blog, Squidoo lens, etc., you will find income flowing to you gradually and steadily. You can promote as many products as you want. The major disadvantage is that you have to compete with a large number of affiliates, many of them could be experienced marketers. The other disadvantage is that you need to put in a lot of efforts for some time if you want to earn passive income for a long time. 

3) Promoting CPA offers: This is similar to earning affiliate commissions but you can earn money for the leads you generate even without any sales taking place. When people sign up for free offers or just provide their email ids to get more information, you get paid. The chances of earning will be better because people will be more willing to sign up for free offers or for receiving emails than to buy a product. The disadvantage is that the pay per lead will be very small and you have to generate a large number of leads to earn a substantial income. 

4) Contextual Advertising: You can earn money by displaying contextual ads on your site. This is a free way to earn money. All you need to do is to create a blog on a topic and sign up for a free adsense account with Google or an account with another Ad network. Just by creating new posts to your blog periodically and promoting your blog through free methods like pinging, you will get traffic. However, the earnings per click will be very small and you will need a significant amount of traffic across  a number of sites to earn a steady  income.