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Initially you may only be making a tiny amount of money passively, and you might even want to re-invest that money so that it compounds and grows faster. But with a few time, its possible to create enough passive income you could quit your job or retire .

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 could be long-term recurring income, and in other cases it might be short lived or inconsistent.

In some circumstances youll need to put in some effort up front, but then it wont need 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 thoughts in this informative article 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 by other people that youre paying.  Selling ebooks or classes will need on-going customer support, plus youll need a consistent traffic source in order to continue to create sales. It is possible and there are individuals who've 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 fulltime for ten decades and Ive sold ebooks and classes in the past. Theyre great ways to make money, I just dont consider these to be passive, in the majority of cases. .

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Just about 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 chances than what will be recorded here.

Now lets have a look at a few of the best ways to produce passive income. Some of these are investments which will require some money to start with. Others wont require any money to get started. In case you dont have the money to invest now, try starting with the methods that dont require any money, and then utilize that money that you earn to invest. .

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Your 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 is a checking or savings account at a local bank which 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 much greater return for you.

My spouse and I keep 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 to their shareholders. As a shareholder, you can re-invest the dividends to purchase more shares of the inventory, or take the dividends in money. 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 track record of success. As a result 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 of the dividends on hold on to this stock for a long time, or use the income generated throughout the dividends.

For far more detail on the subject read Investing in Dividend Stocks at click reference Investopedia. For a list of those stocks, 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 years. Borrowers and lenders can be paired up through a site or marketplace. Instead of going to a bank, the debtor gets a loan from an investor.

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