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Initially 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 quicker. But with some time, its potential to make 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 make without putting in much work. The money will flow in without too much being required of you. In some scenarios 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 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, they all require an excessive amount of effort to be considered as passive.

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Blogging will constantly need on-going work, either by yourself or from other people that youre paying.  Selling ebooks or courses will require on-going customer service, plus youll need a consistent traffic source in order to continue to make sales. It's possible and there are people who have been able to do it passively, but they make up a small percentage of individuals who really set out to do it.

Ive been blogging full-time for ten decades and Ive sold ebooks and classes 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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Nearly any business can be a source of passive income if youre paying others to run the business. This is true with both online and traditional businesses. This opens up even more chances than what will be recorded here.

Now lets have a look at some of the best ways to produce passive income. Some 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, consider starting with the approaches that dont need any money, and then use that money that you earn 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 is a checking or savings account at a local bank that pays you a terrible interest rate. You can open a high yield savings account or money market account with an online bank which will earn a lot greater return for you.

My spouse 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 1.85% 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 to their shareholders. As a shareholder, you can re-invest the dividends to buy more shares of the stock, or take the dividends in cash. Reinvesting will let you own more shares, 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 history 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 all of the dividends on hold on to the stock for quite a long time, or make use of the income produced throughout the dividends.

For far more detail on the topic read Investing in Dividend Stocks at Investopedia. For a list of these shares, see this collection from 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. special info Creditors and lenders can be matched up through 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 be eligible for a loan via a traditional bank. And in many cases the debtor gets a better interest rate than they could receive from a bank. As an investor, you can earn a good return as well.