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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 faster. However, with a few time, its potential to make enough passive income that you could quit your job or retire .

Passive income can be a bit of a divisive topic. In general, passive income is any money you make without putting in much effort. The money will flow in without too much being demanded of you. In some scenarios it could be long-term recurring income, and in other instances it might 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 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 opinion, all of them require an excessive amount of effort to be considered as passive.

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Blogging will constantly require on-going work, either by yourself or by others which youre paying.  Selling ebooks or classes will require on-going customer support, plus youll need a consistent traffic supply in order to continue to create sales. It's 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 ten years and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I just dont consider them to be more passive, in most cases. .

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Just about any business can be a source of passive income if youre paying other people 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 take a look at a few of the best ways to make passive income. A number of these are investments which will need some money to start with. Other folks wont require any money to get started. In case you dont have the money to invest now, try starting with the methods that dont need any money, and then use that money that you earn to invest. .

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Your very first financial priority should be to develop an emergency fund that additional hints will cover all of your living expenses for a few months. But dont put this money is 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 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 quick and easy, and can be done online. .

Some companies consistently pay dividends for their shareholders. As a trader, you can re-invest the dividends to buy more shares of the inventory, or take the dividends in money. Reinvesting will let you 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. As a result of this, these investments tend to be considered less risky than the stock market in general.

Dividend stocks can be a great investment whether or not you want to reinvest each of the dividends on hold on to the stock for quite a long time, or make use of the income produced through the dividends.

For much more detail on the subject read Investing in Dividend Stocks in Investopedia. To get a list of these shares, visit this collection out of Dividend.com and this collection from DividendValueBuilder.com.

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Peer-to-peer lending (or P2P) is becoming extremely popular in recent years. Creditors and lenders can be matched up through a site or market. Instead of going to a bank, the debtor gets a loan by an investor.

In some cases the borrower might not have the ability to qualify for a loan via a traditional bank. And in many circumstances the debtor gets a much better interest rate than they could receive from a bank. As an investor, you can earn additional hints a great return too.