If you're willing to work five hours a month on your passive income project, then I suggest doing five months of work on Passive Rails Consulting, as that has minimal execution risk.
Can I make a suggestion? Most people who say "passive income" spend a lot of time fantasizing about the lifestyle relative to actually producing value. It is not terribly difficult to produce value as a programmer. Concentrate on producing value. If you achieve that, you'll trip over $500 a month. Most of the straightforward ways involve identifying a problem for a class of business that you're positioned to solve and then solving it in return for money.
If you want concrete suggestions with regards to markets and form factors, in lieu of repeating myself I'll post a link to an old comment: https://news.ycombinator.com/item?id=5904316
Generally, completely passive income is massively harder and more time intensive to generate than minimal-time-investment income (which is what Patrick suggests above). I have both completely passive and minimal-time-investment income sources, and the passive ones have been MUCH harder and longer work per dollar over the last few years.
Focus on optimising your $/hr (and your hr/month) rather than going for hr == 0 and you'll likely hit your goal much faster.
I had never read your story - very interesting. (Also cool that you're here on HN).
I first heard about Machinima in the Seananners' videos, and now they (you?) appear to be dominating the game market on Youtube. I was surprised the other day when a brazilian (talking in portuguese) had a Machinima affiliation in his video.
I mean he should build custom software for a business in exchange for money. It's a joke, because freelancing is the canonical example of something which is not "passive income."
Can I make a suggestion? Most people who say "passive income" spend a lot of time fantasizing about the lifestyle relative to actually producing value. It is not terribly difficult to produce value as a programmer. Concentrate on producing value. If you achieve that, you'll trip over $500 a month. Most of the straightforward ways involve identifying a problem for a class of business that you're positioned to solve and then solving it in return for money.
If you want concrete suggestions with regards to markets and form factors, in lieu of repeating myself I'll post a link to an old comment: https://news.ycombinator.com/item?id=5904316