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Initially 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 some time, its potential to make enough passive income that 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 effort. The money will flow in without too much being required of you. In some cases it could be long-term recurring income, and in other cases it could be short lived or inconsistent.

In some cases youll need to put in some effort up front, but then it wont require just as much effort in the future 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 informative article because, in my opinion, all of them 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 others which youre paying.  Selling ebooks or classes 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 have been in a position to get it done , but they compose a small percentage of people who really set out to get it done.

Ive been blogging fulltime for ten decades and Ive sold ebooks and courses in the past. Theyre great ways to make money, I just dont consider them to be more passive, in most cases. .

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Just about any business can be a source of passive income when youre paying others to run the business. This is true with both online and traditional businesses. That opens up even more possibilities than what will be listed here.

Now lets take a look at some of the greatest ways to produce passive income. A number of these are investments which will need some money to begin with. Others wont need any money to begin. If you dont have the money to invest now, consider starting with the approaches that dont need 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 can cover all of your living expenses for a couple months. But dont put this money is a checking or savings account at a local bank which 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 much better return for you.

My spouse 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 fast and easy, click site and can be done online. .

Some companies consistently pay dividends to 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 exchange in general.

Dividend stocks can be a great investment whether or not you want to reinvest all of the dividends on hold on to this stock for a long time, or make use of the income generated throughout the dividends.

For much more detail on the topic read Investing in Dividend Stocks at Investopedia. For a list of these shares, visit this collection from Dividend.com and this collection best site from DividendValueBuilder.com.

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Peer-to-peer lending (or P2P) is becoming extremely popular in recent years. Borrowers and lenders can be matched up through a website or marketplace. Instead of going to a bank, the borrower gets a loan by an investor.

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