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At first you may only be making a tiny amount of money passively, and you may even want to re-invest that money so it compounds and grows quicker. However, with a few time, its possible to create 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 effort. The money will flow in without too much being demanded of you. In some scenarios it might be long-term recurring income, and in 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 need as much effort in the long run when youre making the money.

What qualifies as passive income is up for debate. 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 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 from other people which youre paying.  Selling ebooks or courses will need 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've been in a position to do it passively, but they compose a small percentage of individuals who actually set out to do it.

Ive been blogging fulltime for ten decades and Ive sold ebooks and classes in the past. Theyre great ways to make money, I just dont consider these 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 other people to run the business. That is true with both online and traditional businesses. This opens up even more chances than that which will be recorded here.

Now lets have a look at some of the best ways to make passive income. A number of these are investments that will need some money to start with. Others wont require any money to get started. In web case you dont have the money to invest now, try starting with the methods that dont need any money, and then use that money you make to invest. .

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Your first financial priority must be to build up 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 horrible interest rate. You can open a high yield savings account or money market account with an online bank that will earn a lot better 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 quick and simple, and can be done online. .

Some companies consistently pay dividends for their shareholders. As a shareholder, you can re-invest the dividends to purchase more shares of this stock, use this link or take the dividends in money. Reinvesting will allow you to own more shares, which leads 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. 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 each of the dividends on hold on to the stock for a long time, or make use of the income produced through the dividends.

For far more detail on the topic read Investing in Dividend Stocks in Investopedia. To get a list of these shares, see 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 years. Creditors and lenders can be paired up via a site or marketplace. Instead of going to a bank, the borrower gets a loan by an investor.

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