Which term refers to income generated from assets without the necessity of work?

The term that refers to income generated from assets without the necessity of work is unearned income. This type of income can arise from various sources such as dividends from investments, rental income from properties, interest earnings from bank accounts or bonds, and capital gains from asset sales.

Unearned income is distinct from earned income, which is generated through active participation in work or services provided. For example, wages and salaries derived from employment are considered earned income, as they require active labor. Understanding this distinction is crucial for recognizing how different types of income contribute to overall financial well-being.