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At first 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 quicker. But with some time, its possible to create 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 that you make without putting in much work. The money will flow in without too much being demanded of you. In some cases it might 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 debate. Most lists which youll find online will include things like blogging, writing e-books, or creating your own course. Im not including those thoughts in this informative article because, in my opinion, all of them require too much effort to be considered as passive.

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Blogging will constantly need on-going work, either by yourself or from others that youre paying.  Selling ebooks or classes 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 individuals who've been in a position to get it done passively, but they make up a small percentage of individuals who really set out to do it.

Ive been blogging fulltime for ten decades and Ive sold ebooks and classes in the past. Theyre great ways to earn money, I just dont consider these to be passive, in the majority of cases. .

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Nearly any business can be a source of passive income when 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 recorded here.

Now lets take a peek at some of basics the best ways to make passive income. A number of these are investments that will need some money to begin with. Other folks wont require any money to begin. If you dont have the money to invest now, try starting with the approaches that dont require any money, and then use that money that you make to invest. .

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Your very first financial priority should be to develop an emergency fund that will cover all of your living expenses for a couple months. But dont put this money would be 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 lot 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 easy, 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 inventory, or take the dividends in cash. Reinvesting will allow you to own more stocks, 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 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 terrific investment regardless of whether you want to reinvest all of the dividends on hold on to this stock for quite a long time, or use the income generated through the dividends.

For far more detail on the topic read Investing in Dividend Stocks at 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 view it now 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 qualify for a loan via a traditional bank. And in many circumstances the borrower gets a better interest rate than they might get from a bank. As an investor, you can earn a great return too.