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Initially you may only be making a small amount of money passively, and you may even want to re-invest that money so that it compounds and grows quicker. However, with some time, its potential to make 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 scenarios it might be long-term recurring income, and in some other instances it could be short lived or inconsistent.

In some circumstances youll need to put in some effort up front, but then it wont need just as much effort in the long run when youre making the money.

What qualifies as passive income is up for discussion. Most lists which youll find online will include things such as blogging, writing e-books, or creating your own course. Im not including those ideas in this informative article because, in my own opinion, they all require an excessive amount of effort to be considered as passive.

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Blogging will always 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 source in order to continue to create sales. It's possible and there are individuals who have been able to do it , but they make up a small percentage of people who actually set out to get it done.

Ive been blogging fulltime for ten years and Ive sold ebooks and classes in the past. Theyre great ways to make money, I simply dont consider them to be passive, in most 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 site web traditional businesses. This opens up even more possibilities than what will be recorded here.

Now lets take a look at a few of the greatest ways to produce passive income. Some of them are investments which will require some money to start with. Other folks wont require any money to get started. If you dont have the money to invest now, try starting with the approaches that dont need any money, and then utilize that money that you make to invest. .

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Your very first financial priority must be to develop an emergency fund that can cover all your living expenses for a few 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 that will earn a much greater return for you.

My spouse 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 other an account with CIT is fast 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 purchase more shares of this inventory, or take the dividends in money. Reinvesting will let you own more stocks, which contributes 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 history of success. Because of this, these investments tend to be considered less risky than the stock market in general.

Dividend stocks can be a great investment regardless of whether you want to reinvest all the dividends on hold on to the stock for a long time, or make use of the income generated through the dividends.

For much more detail on the topic read Investing in Dividend Stocks at Investopedia. To get 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) has become extremely popular in recent years. Creditors and lenders can be matched up through a site or marketplace. Instead of going to a bank, the borrower receives a loan from an investor.

In some cases the borrower may not be able to qualify for a loan via 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 too.