I haven't given up on passive income, but I try to work smarter not harder. That being said what I do would be considered semi passive income. Since consulting work isn't consistent I've spent about 2 years building up a network of design online vinyl lettering and graphics sites that require little to no daily work on my end. I outsource production and shipping and take a good piece of each sale. On average I devote 30 minutes a day handling emails, phone calls, and submitting POs. I've automated nearly everything once an order is placed from generating the vector cut files to submitting purchase orders. My image generating api does all that magic http://ionapi.com (closed beta) and a few of the sites http://boatdecals.biz http://letteringhq.com and http://racegraphics.com. Slowly building on past work over these two years I've went from making nothing to being able to live off of the income of these businesses.

So my main advice is start somewhere and don't find yourself so indecisive you do NOTHING. There are lots of opportunities in small niches especially. Pick one you love and try to tap into something. Myself, outside of being a developer I know signs and graphics pretty well, so it was a logical direction to go.