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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 that it compounds and grows faster. However, with some 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 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 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 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 opinion, they all require too much effort to be considered as passive.

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Blogging will constantly need on-going work, either by yourself or from other people which youre paying.  Selling ebooks or classes will require on-going customer service, and 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 get it done passively, but they make up a small percentage of people who actually set out to get it done.

Ive been blogging full-time for 10 years and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I just dont consider these to be more passive, in the majority of cases. .

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Nearly any business can be a source of passive income when youre paying other people to run the business. This is true with both online and traditional businesses. This opens up even more chances than what will be listed 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. Other folks wont require any money to begin. In case you dont next have the money to invest now, try starting with the methods that dont require any money, and then use that money that you make to invest. .

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Your very first financial priority must be to build up an emergency fund that will cover all your living expenses for a few months. But dont put this money is 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 which will earn a lot greater return for you.

My wife 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 1.85% 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 for their shareholders. As a shareholder, you can re-invest the dividends to buy more shares of this inventory, or take the dividends in cash. Reinvesting will allow you to 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. As a result 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 all the dividends on hold on to the stock for quite a long time, or use the income generated throughout the dividends.

For much more detail on the subject read Investing in Dividend Stocks at Investopedia. To get a list of these 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. Creditors and lenders can be paired up through a website or marketplace. Instead of going to a bank, the borrower gets a loan from an investor.

In some situations the borrower might not be able to qualify for a loan through a traditional bank. And in many circumstances the borrower gets a much better interest rate than they could check get from a bank. As an investor, you can earn a great return as well.