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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. But with some time, its possible to make enough passive income you could quit your job or retire early.

Passive income can be a small divisive topic. In general, passive income is any money you make without putting in much effort. The money will flow in without too much being demanded of you. In some scenarios it might 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 long run when youre making the money.

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

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Blogging will constantly need on-going work, either by yourself or from other people that youre paying.  Selling ebooks or classes will need on-going customer support, plus youll need a consistent traffic source in order to continue to make sales. It's possible and there are people who've been able to do it passively, but they compose a small percentage of people who really set out to do it.

Ive been blogging full-time for ten decades and Ive sold ebooks and classes in the past. Theyre great ways to make money, I simply dont consider them to be more 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. That is true with both online and traditional businesses. That opens up even more possibilities than that which will be recorded here.

Now lets take a look at some of the best ways to produce passive income. A number of them are investments which will require some money to start with. Others wont need any money to begin. In case you dont have the money to invest now, consider starting with the methods that dont require any money, and then use that money you earn to invest. .

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Your very first financial priority must be to build up an emergency fund that can cover all of your living expenses for a few months. But dont put this money is a checking account or savings account at a local bank which pays you a horrible 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 spouse and I keep 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. my sources 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 the dividends to buy more shares of the stock, or take the dividends in money. Reinvesting will allow you to own more stocks, 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 go right here the stock market in general.

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

For far more detail on the subject read Investing in Dividend Stocks in Investopedia. For 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 decades. Creditors and lenders can be paired up via a website or market. Instead of going to a bank, the borrower receives a loan by an investor.

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