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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 that it compounds and grows quicker. But with some time, its possible to make enough passive income you could quit your job or retire .
In some cases youll need to put in some effort up front, but then it wont require as much effort in the long run when youre making the money.
Exactly 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 informative article because, in my own opinion, they all require an excessive amount of effort to be considered as passive.
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Blogging will constantly require on-going work, either by yourself or by others that youre paying. Selling ebooks or courses will need 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 have been in a position to do it , but they compose a small percentage of individuals who really set out to do it.
Ive been blogging full-time for ten years and Ive sold ebooks and courses in the past. Theyre great ways to earn money, I simply 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 others to run the business. This is true with both online and traditional businesses. This opens up even more possibilities than what will be listed here.
Now lets take a peek at a few of the greatest ways to make passive income. Some of them are investments that will require some money to start with. Others wont require any money to begin. In case you dont have the money to invest now, consider starting with the methods that dont require any money, and next then utilize that money that you make to invest. .
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Your 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 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 see here with an online bank which will earn a lot greater 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 fast and simple, and can be done online. .
Some companies consistently pay dividends for their shareholders. As a shareholder, you can re-invest the dividends to purchase more shares of this stock, or take the dividends in money. 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 track record 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 whether or not you want to reinvest each of the dividends on hold on to the stock for quite a long time, or make use of the income produced through the dividends.
For much more detail on the subject read Investing in Dividend Stocks in Investopedia. For a list of these stocks, see this collection from Dividend.com and this collection from DividendValueBuilder.com.
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Peer-to-peer lending (or P2P) is becoming extremely popular in recent decades. Creditors and click lenders can be paired up via a site or market. Instead of going to a bank, the debtor receives a loan by an investor.
In some situations the borrower may not have the ability to qualify for a loan through a traditional bank. And in many cases the debtor gets a much better interest rate than they might receive from a bank. As an investor, you can earn a great return too.