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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 faster. But with a few time, its potential to create 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 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 other cases it could 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 future when youre making the money.

Exactly what qualifies as passive income is up for discussion. Most lists which youll find online will include things like blogging, writing e-books, or creating your own course. Im not including those thoughts 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 constantly require on-going work, either by yourself or from other people which youre paying.  Selling ebooks or courses will need on-going customer service, plus youll need a consistent traffic source in order to continue to create sales. It's possible and there are people who have been able to get it done passively, but they compose a small percentage of people who actually set out to do it.

Ive been blogging full-time for 10 years and Ive sold ebooks and classes in the past. Theyre great ways to earn money, I just 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 when youre paying other people to run the business. This is true with both online and traditional businesses. That opens up even more chances than that which will be recorded here.

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

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Your very first financial priority should be to build up an emergency fund that will cover all of your living expenses for a few months. But dont put this money would be a checking account 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 that will earn a much greater return for you.

My wife and I maintain our emergency fund in my response 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 shareholder, you can re-invest the dividends to buy more shares of this inventory, or take the dividends in money. Reinvesting will let you own more shares, 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 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 terrific investment regardless of whether you want to reinvest each the dividends on hold on to the stock for a long time, or make use of the income generated through 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 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 content via a site or market. Instead of going to a bank, the debtor receives a loan by an investor.

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