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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. But with a few time, its possible 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 you earn without putting in much effort. The money will flow in without too much being required of you. In some cases it might be long-term recurring income, and in some other instances 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.

What qualifies as passive income is up for debate. Most lists which 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 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 by others that youre paying.  Selling ebooks or courses will require on-going customer service, and youll need a consistent traffic supply in order to continue to make sales. It is possible and there are individuals who have been in a position to get it done , but they compose a small percentage of individuals who really set out to get it done.

Ive been blogging full-time for ten years and Ive sold ebooks and courses in the past. Theyre great ways to make money, I just dont consider these to be passive, in most cases. .

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Just about any business can be a source of passive income if youre paying other the original source people to run the business. That is true with both online and traditional businesses. That opens up even more chances than that which will be recorded here.

Now lets have a peek at a few of the best ways to produce passive income. A number of them are investments which will need some money to start with. Other folks wont require any money to begin. If you dont have the money to invest now, try starting with the methods that dont need any money, and then use that money that you make to invest. .

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Your very first financial priority should be to build up an emergency fund that can cover all your living expenses for a couple months. But dont put this money would be a checking or savings account at a local bank which 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 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 1.85% 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 for their shareholders. As a trader, 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 track record 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 regardless of whether you want to reinvest each the dividends on hold on to the stock for a long time, or use the income produced throughout the dividends.

For much more detail on the topic read Investing in Dividend Stocks in Investopedia. For a list of those stocks, 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 decades. Borrowers and lenders can be paired up via a site or market. Instead of going to a bank, the borrower receives a loan by an investor.

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