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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 it compounds and grows quicker. However, with a few time, its potential to make 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 could be long-term recurring income, and in some other instances 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 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 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 require on-going work, either by yourself or by others that youre paying.  Selling ebooks or courses will need on-going customer service, and youll need a consistent traffic source in order to continue to create sales. It is possible and there are people who've been able to get it done , but they compose a small percentage of people who actually set out to get it done.

Ive been blogging full-time for 10 decades and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I just dont consider these to be more passive, in most cases. .

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Nearly any business can be a source of passive income if youre paying other people to run the business. This is true with both online and traditional businesses. This opens up even more possibilities 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 them are investments which will require some money to begin with. Others wont need 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 very first financial priority must be to develop an emergency fund that will cover all your look these up living expenses for a couple months. But dont put this money would be a checking account 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 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 easy, 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 here shares of this stock, or take the dividends in money. Reinvesting will allow you to own more stocks, 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 track record of success. Because of this, these investments tend to be considered less risky than the stock market in general.

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

For far more detail on the topic read Investing in Dividend Stocks at Investopedia. For a list of these stocks, 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 decades. Borrowers and lenders can be paired up via a site 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 be eligible for a loan through 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 good return as well.