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Initially you may only be making a small amount of money passively, and you might even want to re-invest that money so it compounds and grows faster. However, with some time, its potential to create enough passive income you could quit your job or retire early.

Passive income can be a bit of a divisive topic. In general, passive income is any money that you earn without putting in much effort. The money will flow in without too much being required of you. In some cases it could be long-term recurring income, and in some other cases it could be short lived or inconsistent.

In some circumstances youll need to put in some effort up front, but then it wont need as much effort in the future when youre making the money.

What qualifies as passive income is up for debate. Most lists that youll find online will include things like blogging, writing e-books, or creating your own course. Im not including those thoughts in this informative article because, in my own opinion, they all require too much effort to be considered as passive.

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Blogging will always require on-going work, either by yourself or by other people which youre paying.  Selling ebooks or courses will require on-going customer service, plus youll need a consistent traffic source in order to continue to make sales. It is possible and there are people who have been in a position to get it done , but they make up a small percentage of individuals who really set out to get it done.

Ive been blogging fulltime for ten decades and Ive sold ebooks and classes in the past. Theyre great ways to earn money, I just dont consider these to be passive, in most cases. .

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Nearly any business can be a source of passive income if youre paying other people to run the business. This is true with both online and traditional businesses. This opens up even more chances than what will be recorded here.

Now lets take a look at some of the greatest ways to produce passive income. A number of them are investments that will require some money to start with. Other folks wont require any money to begin. In case you dont have the money to invest now, try starting with the approaches that dont need any money, and then use that money that you make to invest. .

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Your first financial priority must be to develop an emergency fund that can cover all your living expenses for a couple months. But dont put this money would be a checking account or savings account at a local bank which pays you a terrible interest rate. You can open a high yield savings account or money market account with an online bank which will earn a much greater return for you.

My wife and I maintain our emergency fund in a money market account with CIT Bank. At the moment (October 2018) CIT money market accounts are earning 1.85% APY and CIT savings accounts are earning 1.55% APY. Thats 22x the national average! Opening an account with CIT is fast and easy, and can be done online. .

Some companies consistently pay dividends for their shareholders. As a shareholder, you can re-invest website here the dividends to purchase more shares browse around this site of the stock, or take the dividends in money. Reinvesting will allow you to own more shares, which contributes to more dividends in the future (ideally).

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The companies that consistently pay dividends tend to be large companies with a long history of success. Because of this, these investments tend to be considered less risky than the stock exchange in general.

Dividend stocks can be a great investment regardless of whether you i was reading this want to reinvest each of the dividends on hold on to the stock for a long time, or use the income generated through the dividends.

For far more detail on the topic read Investing in Dividend Stocks at Investopedia. To get a list of those stocks, visit this collection from Dividend.com and this collection from DividendValueBuilder.com.

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Peer-to-peer lending (or P2P) is becoming extremely popular in recent years. Borrowers and lenders can be paired up via a site or market. Instead of going to a bank, the debtor receives a loan by an investor.

In some situations the borrower may not have the ability to be eligible for a loan through a traditional bank. And in many circumstances the debtor gets a much better interest rate than they might receive from a bank. As an investor, you can earn a great return too.