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Initially you may only be making a tiny amount of money passively, and you may 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 cases it might be long-term recurring income, and in other instances it might 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 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 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 from others which youre paying.  Selling ebooks or classes will need on-going customer support, plus youll need a consistent traffic source in order to continue to create sales. It is possible and there are people who've been able to do it , but they compose a small percentage of individuals who actually set out to get it done.

Ive been blogging fulltime for 10 decades and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I simply dont consider them to be passive, in most 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. That opens up even more possibilities than what will be recorded here.

Now lets have a peek at some of the best ways to make passive income. A number of them are investments that will need some money to start with. Other folks wont need any money to get started. In case you dont have the money to invest now, consider starting with the approaches that dont need any money, and then utilize that money you earn to invest. .

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Your first financial priority must be to develop an emergency fund that will cover all of your living expenses for a couple months. But dont put this money would be a checking or savings account at a local bank that pays you a terrible his comment is here interest rate. You can open a high yield savings account or money market account with an online bank which 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 1.85% 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 trader, you can re-invest the dividends to purchase more shares of the inventory, or take the dividends link in money. Reinvesting will allow you to own more stocks, 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 history of success. 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 of the dividends on hold on to this stock for a long time, or make use of the income generated through the dividends.

For much more detail on the subject read Investing in Dividend Stocks at Investopedia. For 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. Creditors and lenders can be matched up via a site or marketplace. Instead of going to a bank, the debtor gets a loan from an investor.

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