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At first 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. However, with a few time, its potential to make enough passive income you could quit your job or retire .
Passive income can be a small divisive topic. In general, passive income is any money that you earn without putting in much effort. The money will flow in without too much being demanded 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.
Exactly 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 ideas in this informative article because, in my opinion, all of them require an excessive amount of effort to be considered as passive.
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Blogging will always need on-going work, either by yourself or by others that youre paying. Selling ebooks or classes will need on-going customer service, and youll need a consistent traffic supply in order to continue to create sales. It's possible and there are people who have been able to get it done passively, but they compose a small percentage of individuals who actually 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 them 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 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 recorded here.
Now lets take a peek at a few of the best ways to produce passive income. A number of these are investments that will need some money to begin visit this website 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 utilize that money you make to invest. .
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Your very first financial priority should be to develop an emergency fund that will cover all of your living expenses for a few 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 which will earn a lot 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 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 purchase more shares of the inventory, 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 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 terrific investment whether or not you want to reinvest all the dividends on hold on to the stock for quite a long time, or make use of the income generated through the dividends.
For far more detail on the subject read Investing in Dividend Stocks at Investopedia. For a list of these shares, 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. Creditors and lenders can be matched up via a site or marketplace. Instead of going to a bank, the borrower receives a loan by an investor.
In some cases the borrower might not be able to qualify for a loan via a traditional bank. And in many cases the borrower gets a better interest rate than they might get from a bank. As an investor, you can earn a good return too.