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The cities whose residents make the most passive income

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A Lee Enterprises, Incorporated newspaper. Majority shareholder: David Hoffmann, Hoffmann Media Group.

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The cities whose residents make the most passive income

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Passive income streams can be a large contributor to wealth creation, and higher-income households are more likely to have the means to invest in assets that provide it.

Black and Hispanic households are least likely to have passive income

The ability to earn passive income increases with total income, and passive income streams tend to make up a larger share of income for wealthier households. In fact, the wealthiest 10% of American households own 89% of all U.S. stocks, according to data from the Federal Reserve. Likewise, nearly 50% of the nation’s wealthiest households own residential property that is not their primary residence, compared to just 13% of all American households.

At the regional level, households on the West Coast, Northeast, and Florida tend to earn more passive income. These differences vary based on total household income and other demographic factors. California and Florida residents earn the most, with median passive income of $7,000 and $6,000 per year, respectively. Whereas California has one of the highest median total household incomes of any state, Florida is home to a larger share of retirees who tend to depend on passive income to cover their living expenses.

California and Florida residents earn the most passive income

To determine the metropolitan areas whose residents make the most passive income, researchers at ChamberOfCommerce.org analyzed earnings and income data from the U.S. Census Bureau. Metro areas were ranked by median passive income among households who earn passive income. Researchers also calculated the percentage of households with passive income, median total household income, and the poverty rate.

Only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, metro areas were grouped into the following cohorts based on population size: 

Here are the metro areas whose residents earn the most passive income.

Small and midsize metros whose residents make the most passive income

15. Memphis, TN-MS-AR

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13. Austin-Round Rock, TX

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12. Chicago-Naperville-Elgin, IL-IN-WI

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11. Denver-Aurora-Lakewood, CO

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10. Tucson, AZ

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9. Phoenix-Mesa-Scottsdale, AZ

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8. Boston-Cambridge-Newton, MA-NH

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7. New York-Newark-Jersey City, NY-NJ-PA

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6. Riverside-San Bernardino-Ontario, CA

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5. San Francisco-Oakland-Hayward, CA

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4. San Diego-Carlsbad, CA

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3. San Jose-Sunnyvale-Santa Clara, CA

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2. Los Angeles-Long Beach-Anaheim, CA

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1. Miami-Fort Lauderdale-West Palm Beach, FL

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