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At first 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 faster. But with a few time, its potential to create enough passive income you could quit your job or retire early.

Passive income can be a small divisive topic. In general, passive income is any money you earn without putting in much work. 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 cases it might 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 long run when youre making the money.

Exactly 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 ideas in this post because, in my own opinion, all of them require too much effort to be considered as passive.

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

Ive been blogging fulltime for ten decades and Ive sold ebooks and courses in the past. Theyre great ways to make 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 others 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 look at a few of the greatest ways to make passive income. Some of these are investments which will require some money to begin with. Other folks wont need 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 utilize that money that you make to invest. .

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Your first financial priority should be to build up an emergency fund that can 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 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 1.85% 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 trader, you can re-invest the dividends to buy more shares of this stock, or take the dividends in cash. Reinvesting will allow you to own more shares, which Resources contributes 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 terrific investment regardless of whether you want to reinvest each 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 topic read Investing in Dividend Stocks at Investopedia. For a list of those shares, 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 website or marketplace. Instead of going to a bank, the debtor gets a loan from an investor.

In some cases the borrower may not be able to qualify for a loan via a traditional bank. And in many cases the borrower gets Read Full Report a much better interest rate than they could receive from a bank. As an investor, you can earn a great return as well.