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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 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 that 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 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 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 that youll find online will include things such as 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 require on-going work, either by yourself or from other people which youre paying.  Selling ebooks or courses will require on-going customer support, 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 passively, but they make up a small percentage of people who actually set out to do it.

Ive been blogging fulltime for 10 decades and Ive sold ebooks and classes in the past. Theyre great ways to make 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 others to run the business. That is true with both online and traditional businesses. This opens up even more possibilities than that which will be recorded here.

Now lets have a look at a few of the best ways to produce passive income. A number of them are investments that will need some money to begin with. Other folks wont require any money to get started. 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 that 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 couple months. But dont put this money would be a checking account 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 that 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 check my site 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 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 regardless of whether you want to reinvest each the dividends on hold on to this stock for a long time, or use the income generated through the dividends.

For much more detail on the topic read Investing in Dividend Stocks in Investopedia. For a list of these 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 decades. Creditors and lenders can be paired up through a website or market. Instead of going to a bank, the borrower gets a loan by an investor.

In some cases the borrower might not have the ability to qualify for a loan through a traditional bank. And in many cases the debtor gets a much better interest rate than they could get from a bank. As an investor, you can earn a good visit site return too.