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

Passive income can be a small divisive topic. In general, passive income is any money you make without putting in much work. 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 require as much effort in the long run when youre making the money.

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

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Blogging will always need on-going work, either by yourself or by others that youre paying.  Selling ebooks or courses will need on-going customer service, and youll need a consistent traffic source in order to continue to create sales. It is possible and there are people who've been in a position to do it , but they compose a small percentage of people who really set out to get it done.

Ive been blogging full-time for 10 decades and Ive sold ebooks and classes in the past. Theyre great ways to earn money, I just dont consider them to be passive, in most cases. .

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

Now lets have a look at some of the best ways to produce passive income. Some of them are investments that will require some money to start with. Other folks wont need any money to get started. In case you dont have the money to invest now, try starting with the methods that dont require any money, and then use that money that you make to invest. .

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

My spouse 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 1.85percent APY and CIT savings accounts are earning 1.55% APY. Thats 22x the national average! Opening an account with CIT is quick and easy, and can be done online. .

Some companies consistently pay dividends for their shareholders. As a try this site shareholder, you can re-invest the dividends to buy more shares of this stock, or take the dividends in cash. 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. find this Because of this, these investments tend to be considered less risky than the stock market in general.

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

For far more detail on the subject read Investing in Dividend Stocks in Investopedia. To get a list of these shares, see this collection out of 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 marketplace. Instead of going to a bank, the borrower gets a loan from an investor.

In some situations the borrower may not be able to be eligible for a loan through a traditional bank. And in many cases the borrower gets a much better interest rate than they could get from a bank. As an investor, you can earn a good return too.