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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 some time, its possible to create enough passive income that 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 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 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 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 post because, in my own opinion, all of them require an excessive amount of effort to be considered as passive.

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Blogging will constantly need on-going work, either by yourself or from others which youre paying.  Selling ebooks or courses will need on-going customer service, plus youll need a consistent traffic supply in order to continue to make sales. It's possible and there are people who've been in a position to get it done , but they make up a small percentage of people who really 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 just 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 others to run the business. That is true his comment is here with both online and traditional businesses. This opens up even more possibilities than what will be listed here.

Now lets take a look at a few of the greatest ways to produce passive income. Some of these are investments that will need some money to begin with. Others wont require any money to get started. If you dont have the money to invest now, consider starting with the approaches that dont require any money, and then use that money you earn to invest. .

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Your first financial priority should be to build up an emergency fund that can cover all your living expenses for a few months. But dont put over here this money would be 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 much greater 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 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 inventory, or take the dividends in cash. Reinvesting will let you own more shares, 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 terrific investment whether or not you want to reinvest all the dividends on hold on to this stock for quite a long time, or use the income produced through the dividends.

For much more detail on the subject read Investing in Dividend Stocks at Investopedia. For a list of these stocks, see this collection out of Dividend.com and this collection from DividendValueBuilder.com.

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Peer-to-peer lending (or P2P) has become extremely popular in recent years. Borrowers and lenders can be matched up through a website or market. Instead of going to a bank, the borrower gets a loan from an investor.

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