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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 that it compounds and grows quicker. However, with some time, its possible to create enough passive income that 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 work. The money will flow in without too much being required of you. In some scenarios it could be long-term recurring income, and in 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 just as much effort in the future 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 post because, in my own 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 which youre paying.  Selling ebooks or courses will require on-going customer service, and youll need a consistent traffic supply 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 10 years and Ive sold ebooks and classes in the past. Theyre great ways to earn money, I just dont consider these to be more passive, in the majority of cases. .

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Just about 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. This opens up even more chances 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 that will need some money to start with. Others wont require any money to begin. In case you dont have the money to invest now, try starting with the methods that dont require any money, and then utilize that money you earn to invest. .

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Your very first financial priority must be to develop an emergency fund that can cover all your living expenses for a few months. But dont put this money is a checking account or savings account at a local click now 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 lot 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 quick and simple, and can be done online. .

Some companies consistently pay dividends to their shareholders. As a shareholder, you can re-invest the dividends to purchase more shares of the inventory, or take the dividends in money. Reinvesting will let you own more shares, which leads to greater dividends in the future (ideally).

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

Dividend stocks can be a terrific investment whether or not you want to reinvest each the dividends on hold on to this stock for quite a long time, or make use of the income generated through the dividends.

For much more detail on the topic read Investing in Dividend Stocks at Investopedia. For a list of those stocks, 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 through a site or marketplace. Instead of going to a bank, the borrower gets a loan by an investor.

In some cases the borrower might not have the ability to be eligible for a loan via a traditional bank. And in many cases the debtor gets a much better interest rate than they might receive from a bank. As an investor, you can earn why not try here a good return too.