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Initially you may only be making a small amount of money passively, and you may even want to re-invest that money so it compounds and grows quicker. However, with a few 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 need as much effort in the long run when youre making the money.
What qualifies as passive income is up for discussion. Most lists that 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 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 courses will need on-going customer support, plus youll need a consistent traffic source in order to continue to create 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 do it.
Ive been blogging full-time for ten 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 the majority of 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 chances than that which will be listed here.
Now lets take a look at some of the greatest ways to make passive income. A number of them are investments that will need some money to begin with. Others wont require any money to begin. In case you dont have the money to invest now, consider starting with the approaches that dont require any money, and then use that money you earn to invest. .
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Your 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 would be a checking 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 which will earn a much 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 1.85% 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 to their shareholders. As a shareholder, you can re-invest the dividends to purchase more shares of the 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 the stock for quite a long time, or make use of the income generated throughout the dividends.
For much more detail on the subject read Investing in Dividend Stocks at Investopedia. To get a list of these stocks, see this collection out of Dividend.com and this collection from DividendValueBuilder.com.
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Peer-to-peer lending (or P2P) has become extremely popular Our site in recent years. Creditors and lenders can be paired up through a website or marketplace. Instead my site of going to a bank, the debtor receives a loan by an investor.
In some situations the borrower may not have the ability to be eligible for a loan via a traditional bank. And in many cases the debtor gets a much better interest rate than they could get from a bank. As an investor, you can earn a great return too.