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At first you may only be making a tiny amount of money passively, and you might even want to re-invest that money so that it compounds and grows quicker. However, with some time, its possible to create 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 earn without putting in much effort. The money will flow in without too much being required 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 circumstances 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.

Exactly what qualifies as passive income is up for discussion. Most lists that 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, all of them require too much effort to be considered as passive.

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Blogging will always need on-going work, either by yourself or by others which youre paying.  Selling ebooks or classes will need on-going customer support, and youll need a consistent traffic supply in order to continue to make sales. It is possible and there are people who have been able to do it passively, but they make up a small percentage of people who really set out to get it done.

Ive been blogging full-time for 10 decades and Ive sold ebooks and classes in the past. Theyre great ways to earn money, I just dont consider them to be passive, in the majority of cases. .

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Just about 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. This opens up even more possibilities than what will be listed here.

Now lets take a like this look at some of the best ways to produce passive income. A number of them are investments which will need some money to begin with. Other folks wont require any money to get started. If you dont have the money to invest now, consider starting with the approaches that dont need any money, and then use that money you make to invest. .

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Your very first financial priority must 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 account 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 greater return for you.

My wife and I keep 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 for their shareholders. As a trader, you can re-invest the dividends to purchase more shares of the stock, or take the dividends in money. Reinvesting will let you own more shares, 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 whether or not you want to reinvest all of the dividends on hold on to this stock for a long time, or use the income generated through the dividends.

For far more detail on the subject read Investing in Dividend Stocks at Investopedia. To get a list of these stocks, visit 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 years. Creditors and lenders can be matched up via a site or market. Instead of going to a bank, the borrower receives a loan from an investor.

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