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Initially you may only be making a tiny 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 create enough passive income that you could quit your job or retire .
In some cases 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.
Exactly 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 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 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 supply in order to continue to create sales. It is possible and there are people who've been in a position to do it , but they compose a small percentage of individuals who really set out to get it done.
Ive been blogging fulltime for 10 years and Ive sold ebooks and classes in the past. Theyre great ways to make money, I just dont consider these to be more passive, in the majority of cases. .
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Just about any business can be a source of passive income if youre paying others to run get more the business. This is true with both online and traditional businesses. That opens up even more chances than what will be recorded here.
Now lets have a peek at a few of the best ways to make passive income. Some of them are investments which will need some money to start with. Others wont need any money to begin. In case you dont have the money to invest now, try starting with the methods that dont Find Out More require any money, and then use that money you make to invest. .
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Your very first financial priority should be to build up an emergency fund that will cover all of your living expenses for a couple months. But dont put this money is 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 which will earn a much greater 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 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 the inventory, or take the dividends in money. Reinvesting will allow you to 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 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 great investment regardless of whether 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 subject read Investing in Dividend Stocks at Investopedia. For a list of those stocks, visit 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 through a site or marketplace. Instead of going to a bank, the borrower receives a loan from an investor.
In some cases the borrower may not be able to qualify for a loan via a traditional bank. And in many circumstances the borrower gets a better interest rate than they might receive from a bank. As an investor, you can earn a great return as well.