Dividends (and capital gain distributions from mutual funds) will be subject to applicable income tax every year, unless the investments are inside a tax deferred type of account. Of course, tax rates and rules change frequently.
Of course, gains are not guaranteed. You may have capital losses instead of capital gains at the end.
Investing also assumes that the person in question is non-poor and lives below his/her means by enough to have extra money that can go into investments. Most non-poor people need to start with the prerequisite of living below their means, if they want to start investing for passive income.