Basic Income, Passive Income, and the Stuff of Dreams

Don’t underestimate the power of just a little money.

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My path into journalism was far from the usual. I didn’t attend an elite university, didn’t spend my 20s interning or working my way up the ranks, and didn’t have any connections. I’ve written about how I went from selling insurance in my mid-30s to being a full-time professional writer and editor, about what drove me, how I was “discovered”, and what the transition was like, but I left out an important monetary component. What allowed me to pursue my dream wasn’t credentials, or family wealth, or years of careful networking — it was a very modest basic income. Having a financial floor to stand on, and the flexibility and peace of mind it provided, empowered me to change the direction of my life in ways I wouldn’t otherwise have risked. Without basic income, you wouldn’t be reading these words.

Basic income typically refers to programs in which people receive regular sums of unconditional, no-strings-attached cash to use as they see fit. The more well known variety, universal basic income (UBI), is basic income paid to an entire community or society, with no means testing or conditions. In my case, I was not part of any government-run program, nor was I the beneficiary of charity or philanthropy. My basic income was one of my own making, with a generous heap of good fortune, of course. 

I purchased my first home in 2018. The local market was favorable, the seller was eager, and the area code was described as “up and coming.” The house was going on a century old, with all the blemishes, defects, and quirks that entailed,¹ and it hadn’t been updated since the Nixon administration. I put some serious TLC into the old gal, both in money and my own labor.² Then when the housing market went through the roof during the COVID-19 pandemic, I seized the opportunity and sold the home in 2021 for far more than the purchase price and renovation costs combined.³ I dumped most of those funds into various investments and financial products, and before long, I’d established a passive income stream of about $500 per month, give or take.

Being out of debt and atop a monetary foundation that would pay out every month whether or not I worked, a new vista opened up for me. The most profound effect was psychological. I’d never lived hand-to-mouth, or faced eviction, or wondered where my next meal would come from. I’d been living a solidly middle-class life, but that life was predicated on work I found intolerably tedious, depressing, and unchallenging — work that paid enough to sustain that quality of life, but only just, and only as long as I kept my head down and kept working. $500 a month is not an extravagant sum of money. It’s not enough to replace having a job. It’s nowhere near enough to live on in any Western country. But it was enough to let me finally pick my head up and look around at my options. It was enough to give me the added financial security and cushion to begin taking the vital risks without which worthwhile endeavors rarely get off the ground.

Writing went from a side hobby and a dream to a serious pursuit. Leaning on my basic income, I reduced my hours at the insurance agency, which enabled me to dedicate the time necessary to grow an audience, get my name out there, build a résumé, and begin getting paid. As money from writing started to flow in, I reduced my hours further, and by the time I did what my detractors smugly advised against, and quit my day job, I had seamlessly transitioned from one career to another. Fittingly, the most consequential contact I made was with the editor-in-chief of one of the magazines I now work for. We’d met on social media and bonded over our shared support of Andrew Yang, the 2020 presidential candidate who has done yeoman’s work in popularizing UBI. It’s funny how things often come full circle like that. Basic income helped me in more ways than one.

Even had writing not panned out for me, I would still have known that I gave it my best shot without jeopardizing my financial security by doing so. And to this day, my basic income, which is still going strong, provides me with peace of mind and a little extra stability in a field that has grown more volatile over the years. Of course, markets rise and fall, and interest rates and inflation are always fluctuating. My investments could dry up, or the financial system could crash. If that happens, I will still be vastly better off for having had a basic income, if only for a time. It’s hard to overstate how transformative this kind of money is, even in modest amounts. 

I choose to call what I have a “basic income” as opposed to “passive income” because it is a basic income in every meaningful respect. Basic income is passive income. Passive income is basic income. Passive income can come from employers or institutions in the form of stipends, from family in the form of allowances or trust funds, from investments in the form of dividends or interest payments, or from retirement plans, social security, pensions, or annuities. Or it could come from basic income. Whether my basic income came from the government, a pension, a nonprofit, my relatives, or my financial portfolio, the effect is the same.

In 2021, the US implemented the expanded child tax credit, in essence a basic income for families with children. Congress allowed it to lapse at the end of the year, but the effect it had on childhood poverty in just six months is striking. Source: Institute on Taxation and Economic Policy

One of the most common criticisms of basic income is that “free money” makes people lazy. Except, that’s not what the data says. A 2020 systematic review of 38 studies on basic income experiments showed that supplementing people’s finances with an unconditional income stream leads to more work and productivity, not less. As the economists who conducted the review wrote:

“Despite a detailed search, we have not found any evidence of a significant reduction in labor supply. Instead, we found evidence that labor supply increases globally among adults, men and women, young and old, and the existence of some insignificant and functional reductions to the system such as a decrease in workers from the following categories: Children, the elderly, the sick, those with disabilities, women with young children to look after, or young people who continued studying. These reductions do not reduce the overall supply since it is largely offset by increased supply from other members of the community.”

In 2024 alone, data from basic income trials in places like Cambridge, Texas, and Kenya show similar results, as does the nearly 50-year track record of Alaska’s statewide basic income, the Alaska Permanent Fund.

Beyond the “official” basic income data, which is so voluminous it would take many books to cover,⁴ once we understand basic income as simply another form of passive income, we can see the issue in an entirely new light. Most people who think basic income makes people lazy hold no such bias against passive income more generally. Outside of elderly retirees or the seriously disabled, most people with passive income choose to work, either because their passive income isn’t enough on its own to live comfortably off of, or because they just enjoy working on things that intrinsically matter to them.

There are few people indeed who, once freed from the burden of making life decisions based purely on monetary considerations, can find nothing productive to do with their time. We all know this. Virtually every successful person in public life, from actors, to musicians, to professional athletes, to CEOs, investors, entrepreneurs, intellectuals, and politicians have passive incomes. In many cases, these revenue streams are large enough that most of these folks probably never need to work again. And yet they do work. The difference is, they have the freedom and autonomy to do the kind of work they find meaningful. Basic income doesn’t pay people to do nothing, it pays them to do anything.

We tend to picture basic income as the government cutting everyone checks enormous enough that no one ever has to work. That’s probably never going to happen, nor does it need to. It’s worth emphasizing that even small amounts of money could be life changing. According to Policy Engine, a tool developed by economist Max Ghenis to calculate the impacts of various policies, a universal basic income at just half the level of my own — $250 per month — would decrease poverty in the US by 45 percent, and 62 percent for children. It would also increase the net income of households by 7.9 percent on average, and over 26 percent for the bottom decile. This is to say nothing about how much human potential it could set free by giving people more freedom and choice to shape their own lives.

I’ve been a supporter of basic income since I first came across the idea more than a decade ago. I’m well-versed in the data, the criticisms, and the arguments. But I’ve also seen it work firsthand. I’ve lived it. From the dawn of civilization, it’s mostly been the wealthy who’ve been freed from the burdens of scarcity to pursue what mattered to them. To this day, family money rests comfortably behind most success stories at the highest echelons of achievement. For every rags-to-riches tale, there are 200 stories of trust funds, silver spoons, and deep familial coffers. Basic income is, at bottom, family money for everyone. And even small sums can make huge differences. Take it from me.

See also: “Universal Basic Income: Everything You Need to Know”

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1. Such as a bedroom that was only accessible by going through another bedroom (known as a “captive” or “walk-through” bedroom). Contractors were hired to build a proper hallway to rectify the issue.

2. I painted about two-thirds of the home myself, and personally revamped and water-proofed the basement, which originally looked like the crypt from Poe’s The Cask of Amontillado (1846). The last Jew who did this much work with his hands was crucified.

3. Tip: perhaps the single most cost-effective renovation you can do to raise the selling price of an old home is getting the outside professionally power washed. It pays for itself dozens of times over in “curb appeal.”

4. UBI researcher and advocate Scott Santens covers many of them.