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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 it compounds and grows quicker. But with a few time, its potential to make enough passive income you could quit your job or retire .

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 required of you. In some scenarios it could be long-term recurring income, and in 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 need just as much effort in the long run when youre making the money.

What qualifies as passive income is up for debate. Most lists which 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 own opinion, they all 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 require on-going customer support, plus youll need a consistent traffic source in order to continue to make sales. It's 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 do it.

Ive been blogging full-time for 10 years and Ive sold ebooks and courses in the past. Theyre great ways to make money, I simply 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 if youre paying other people to run the business. That is true with both online and traditional businesses. This opens up even more chances than what will be recorded here.

Now lets take a look at some of the best ways to make passive income. Some of these are investments which will require some money to begin with. Others wont require any money to get started. In case you dont have the money to invest now, consider starting with the approaches that dont require any money, and then utilize 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 your living expenses for a couple months. But dont put this money would be a checking account 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 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 to their shareholders. As a trader, you can re-invest the dividends to purchase more shares of the stock, or take the dividends in cash. 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 track record of success. Because of this, these investments tend to be considered less risky than the stock exchange in general.

Dividend stocks can be a great investment whether or not you see post want to reinvest each of the dividends on hold on to the stock for a long time, or use the income produced through 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) has become extremely popular in recent decades. Borrowers 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 situations the borrower might not have the ability to qualify for a loan via a traditional bank. And in many cases the debtor gets a better interest rate than they might get from a bank. As an investor, you can earn a great return as well.