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Initially you may only be making a small amount of money passively, and you might even want to re-invest that money so it compounds and grows quicker. However, with some time, its possible to make enough passive income you could quit your job or retire early.

Passive income can be a small divisive topic. In general, passive income is any money that you earn without putting in much work. The money will flow in without too much being demanded of you. In some cases it might be long-term recurring income, and in some 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 require 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 thoughts in this post because, in my own opinion, all of them require too much effort to be considered as passive.

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Blogging will always require on-going work, either by yourself or from other people which youre paying.  Selling ebooks or classes will need on-going customer service, and youll need a consistent traffic source in order to continue to make sales. It is possible and there are people who've been in a position to get it done , but they make up a small percentage of people who really set out to do it.

Ive been blogging fulltime for ten years and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I just 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 when youre paying other people to run the business. This is true with both online and traditional businesses. This opens up even more possibilities than that which will be listed here.

Now lets have a look at some of the greatest ways to produce passive income. Some of these are investments which will require some money to begin with. Others wont need any money to get started. In case you dont have the money to invest now, consider starting with the methods that dont need any money, and read more then use that money 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 couple months. But dont put this money would be a checking account 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 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 an account with CIT is quick and simple, and can be done online. .

Some companies consistently pay dividends to 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 leads 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. As a result 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 each the dividends on hold on to the stock for quite a long time, or use the income produced through the dividends.

For much more detail on the topic read Investing in Dividend Stocks in Investopedia. To get a list of these stocks, visit 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. Creditors and lenders can be paired up via a website or market. Instead of going to a bank, the debtor gets a loan from an investor.

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