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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 potential to make 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 required of you. In some scenarios it might be long-term recurring income, and in some other cases it could 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 long run when youre making the money.

What qualifies as passive income is up for debate. 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 post because, in my opinion, they all require too much effort to be considered as passive.

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Blogging will always need on-going work, either by yourself or by others which youre paying.  Selling ebooks or courses will need on-going customer service, plus youll need a consistent traffic supply in order to continue to make sales. It is possible and there are people who've been in a position to do it , but they compose a small percentage of people who really set out to get it done.

Ive been blogging fulltime for 10 years and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I simply dont consider these to be more passive, in the majority of cases. .

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Nearly any business can be a source of passive income if youre paying others to run the business. This is true with both online and traditional businesses. This opens up even more chances than that which will be recorded here.

Now lets take a look at some of the best ways to produce passive income. A number of these are investments which will require some money to start with. Other folks wont require any money to get started. If 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 first financial priority must be to develop an emergency fund that can cover all of your living expenses for a few months. But dont put this money would be a checking or savings account at a local bank that 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 better return for you.

My wife 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 this inventory, or take the dividends in money. Reinvesting will allow you to 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 exchange in general.

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

For much more detail on the subject read Investing in Dividend Stocks at Investopedia. For 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) is becoming extremely popular in recent decades. Borrowers and lenders can be matched up via a website or marketplace. Instead of going to a bank, the borrower receives a loan from an investor.

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