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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 it compounds and grows quicker. However, with some time, its possible to create enough passive income that 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 earn without putting in much effort. The money will flow in without too much being demanded of you. In some cases it might be long-term recurring income, and in 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 as much effort in the future when youre making the money.

What qualifies as passive income is up for discussion. 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, they all 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 other people 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 make sales. It's possible and there are individuals who've been in a position 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 ten decades and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I simply dont consider them to be more passive, in the majority of cases. .

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Just about 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. This opens up even more chances than what will be recorded here.

Now lets take a peek at some of the greatest ways to produce passive income. Some of these are investments that will need some money to start with. Others wont require any money to get started. In case you dont have the money to invest now, consider starting with the approaches More Bonuses 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 your living expenses for a few months. But dont put this money is a checking or savings account at a local bank that pays you a horrible 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 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 1.85percent 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 for their shareholders. As a trader, you can re-invest the dividends to purchase more shares of the stock, 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 history of success. As a result of this, these investments tend to be considered less risky than the stock market in general.

Dividend stocks can be a great investment regardless of whether you want to reinvest all of the dividends on hold on to the stock for quite a long time, or use the income produced through the dividends.

For far more detail on the subject read Investing in Dividend Stocks in Investopedia. To get a list of those shares, see this collection from 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 matched up through 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 be able to qualify for a loan through a traditional bank. And in many cases the borrower gets a much better interest rate than they might get from a bank. As an investor, you can earn a great return as well.