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

Passive income can be a small divisive topic. In general, passive income is any money that you make without putting in much work. The money will flow in without too much being demanded of you. In some scenarios it might be long-term recurring income, and in some other instances it could be short lived or inconsistent.

In some cases youll need to put in some effort up front, but then it wont require as much effort in the future when youre making the money.

What qualifies as passive income is up for debate. Most lists which 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 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 others which youre paying.  Selling ebooks or courses will require 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 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 just dont consider these to be passive, in most 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. That is true with both online and traditional businesses. That opens up even more possibilities than what will be listed here.

Now lets have a peek at a few of the best ways to produce passive income. Some of these are investments which will require some money to begin with. Other folks wont require any money to begin. In case you dont have the money to invest now, try starting with the approaches that dont need any money, and then use that money that you make 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 would be 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 that will earn a lot better return for you.

My spouse and I keep our emergency fund in a money market account with CIT Bank. you can check here 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 quick and simple, and can be done online. .

Some companies consistently pay dividends to their shareholders. As a trader, you can re-invest the dividends to buy more shares of this stock, or take the dividends in money. Reinvesting will allow you to own more shares, which leads 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 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 the original source be a terrific investment whether or not you want to reinvest each of 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 subject read Investing in Dividend Stocks at Investopedia. To get 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) is becoming extremely popular in recent decades. Creditors and lenders can be paired up via a website or market. Instead of going to a bank, the debtor receives a loan by an investor.

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