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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. But with some time, its potential to make enough passive income 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 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 instances it might be short lived or inconsistent.

In some cases youll need to put in some effort up front, but then it wont require just as much effort in the long run when youre making the money.

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

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

Ive been blogging full-time for ten years and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I simply dont consider them to be passive, in the majority of cases. .

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

Now lets take a look at a few of the greatest ways to make passive income. Some of these are investments which will need some money to begin 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 need any money, and then utilize that money you earn to invest. .

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Your 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 or savings account at a local bank which 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 better 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 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 this stock, or take the dividends in cash. Reinvesting will allow you to own more stocks, which contributes to more dividends in the over at this website 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 great investment regardless of whether you want to reinvest each of the dividends on hold on to this stock for a long time, or use the income generated throughout 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 years. Creditors and lenders can be paired up through a site or marketplace. Instead of going to a bank, the debtor gets a loan by an investor.

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