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At first 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 a few time, its possible to create 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 that you earn 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 might be short lived or inconsistent.

In some cases 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.

Exactly 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 ideas in this post because, in my opinion, all of them require too much effort to be considered as passive.

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Blogging will constantly require on-going work, either by yourself or from other people which youre paying.  Selling ebooks or classes will need 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've been able to do it , but they compose a small percentage of individuals who actually set out to do it.

Ive been blogging full-time for 10 years and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I just dont consider them to be more passive, in the majority of 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 listed here.

Now lets take a peek at a few of the best ways to make passive income. A number of these are investments which will need some money to start with. Others wont require any money to get started. If you dont have the money to invest now, try starting with the methods that dont need any money, and then utilize that money that 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 couple months. But dont put this money is a checking account or savings account at a local bank that 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 lot greater return for you.

My wife 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. Thats 22x the national average! Opening an account with CIT is fast 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 buy more shares of the stock, or take the dividends in money. Reinvesting will let you own more stocks, which leads 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 track record of success. Because of this, these investments tend to be considered less risky than the stock market in general.

Dividend stocks can be a great investment whether or not you want to reinvest all the dividends Full Article on hold on to this stock for a long time, or make use of the income generated throughout the dividends.

For far more detail on the topic read Investing in Dividend Stocks at Investopedia. For a list of these shares, see 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. Borrowers and lenders can be matched up via a website or market. Instead of going to a bank, the debtor gets a loan from an investor.

In some situations the borrower may not be able to qualify for a loan via a traditional bank. And in many cases the borrower gets a much better interest rate than they could receive from a bank. As an investor, you can earn a great return as well.