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At first you may only be making a small amount of money passively, and you might even want to re-invest that money so that it compounds and grows faster. But with some time, its potential to make enough passive income 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 you make 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 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 long run when youre making the money.

Exactly what qualifies as passive income is up for discussion. Most lists that 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 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 that youre paying.  Selling ebooks or classes will require on-going customer support, plus youll need a consistent traffic supply in order to continue to make sales. It is possible and there are individuals who've been able to get it done , but they compose a small percentage of people who actually set out to get it done.

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

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Nearly 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. That opens up even more possibilities than that which will be listed here.

Now lets take a look at a few of the greatest ways to produce passive income. A number of them are investments that will require some money to start with. Others wont need any money to begin. If you dont have the money to invest now, consider starting with the methods that dont require any money, and then utilize that money you earn to invest. .

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Your first financial priority must be to develop an emergency fund that can cover all 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 horrible interest rate. You can open a article high yield savings account or money market account with an online bank which will earn a much greater 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 quick and simple, 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 this stock, or take the dividends in cash. Reinvesting will allow you to own more stocks, which contributes 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 exchange in general.

Dividend stocks can be a terrific investment whether or not you want to reinvest each of the dividends on hold on to this stock for quite a long time, or use the income generated throughout the dividends.

For much more detail on the subject read Investing in Dividend Stocks in Investopedia. To get a list of those 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 decades. Creditors and lenders can be paired up through a website or market. Instead of going to a bank, the borrower gets a loan by an investor.

In some situations the borrower might not be able to be eligible for a loan through a traditional bank. And in many circumstances the borrower gets a much better interest rate than they might get from a bank. As an investor, you can earn a great return as well.