How did the Prophet (blessings and peace of Allah be upon him) earn his living?

The Prophet (blessings and peace of Allah be upon him) used to eat from what he earned with his hands. When he was young, he worked as a shepherd. It was narrated from Abu Hurayrah (may Allah be pleased with him) that the Prophet (blessings and peace of Allah be upon him) said: “Allah never sent any Prophet but he tended sheep.” His Companions said: Even you? He said: “Yes. I used to tend them in return for qaraareet for the people of Makkah.”

Narrated by al-Bukhaari, 2143.

Qareeraat refers to part of a dinar or dirham. 

Our Prophet Muhammad (blessings and peace of Allah be upon him) also used to work in trade with his paternal uncle Abu Taalib and for Khadeejah (may Allah be pleased with her), as is well known in the Seerah (Prophet’s biography). 

Then after that, Allah sufficed him with what He permitted to him of the fay’ (spoils) and ghaneemah (booty), which is the noblest of earnings. 

Fay’ is that which is taken from the kuffaar without fighting.

Ghaneemah is that which is taken from the kuffaar by means of fighting. 

It was narrated that Ibn ‘Umar (may Allah be pleased with him) said: The Messenger of Allah (sa) said: “I have been sent ahead of the Hour with the sword, until Allah alone is worshipped with no partner or associate, and my provision has been placed beneath the shade of my spear.”

Narrated by Ahmad, 6/129; classed as saheeh by al-‘Iraaqi in Takhreej Ihya’ ‘Uloom ad-Deen, 2/352. Also classed as saheeh by al-Albaani in Saheeh al-Jaami‘, 5142. 

Al-Haafiz Ibn Hajar (may Allah have mercy on him) said: 

This hadeeth points to the virtue of the spear (i.e., jihad) and highlights that booty is permissible for this ummah and that the provision of the Prophet (blessings and peace of Allah be upon him) was in booty and not in other kinds of earning. Hence some of the scholars said that it is the best kind of earning. End quote.

Fath al-Baari, 6/98

And Allah knows best.