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At first you may only be making a tiny amount of money passively, and you may even want to re-invest that money so it compounds and grows faster. However, with some time, its potential to make 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 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 might be short lived or inconsistent.

In some cases 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.

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 thoughts in this informative article because, in my own 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 others which youre paying.  Selling ebooks or classes will require on-going customer service, plus youll need a consistent traffic source in order to continue to create sales. It is possible and there are individuals who have been in a position to do it , but they make up a small percentage of people who really set out to get it done.

Ive been blogging fulltime for ten decades and Ive sold ebooks and classes 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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Nearly any business can be a source of passive income if youre paying other people to run the business. This is true with both online and traditional businesses. This opens up even more chances than what will be recorded here.

Now lets have a look at some of the best ways to make passive income. A number of them are investments which will require some money to start with. Other folks wont need any money to begin. In case you dont have the money to invest now, consider starting with the methods that dont require any money, and then use that money you earn to invest. .

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Your very first financial priority must be to build up 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 which pays you a terrible interest rate. my company You can open a high yield savings account or money market account with an online bank that will earn a lot 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% view it now 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 this stock, or take the dividends in cash. Reinvesting will let you own more stocks, which contributes 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 exchange in general.

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

For far 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) has become extremely popular in recent decades. Creditors and lenders can be paired up through a site or marketplace. Instead of going to a bank, the debtor receives 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 circumstances 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.