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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 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 future when youre making the money.
Exactly what qualifies as passive income is up for discussion. 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, they all require an excessive amount of effort to be considered as passive.
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Blogging will always require on-going work, either by yourself or by other people that youre paying. Selling ebooks or courses will need on-going customer service, and youll need a consistent traffic source in order to continue to make sales. It is possible and there are people who've been able to get it done , but they make up a small percentage of people who really set out to do it.
Ive been blogging full-time for 10 decades 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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Nearly any business can be a source of passive income when youre paying other people to run the business. That is true with both online and traditional businesses. That opens up even more possibilities than what will be recorded here.
Now lets have a look at a few of the greatest ways to make passive income. A number of these are investments which will require some money to begin with. Other folks wont need any money to begin. If you dont have the money to invest now, try starting with the methods that dont require any money, and then utilize that money you make to invest. .
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Your first financial priority should be to build up an emergency fund that can cover all your living expenses for a few months. But dont put this money is a checking account or savings account at a local bank that pays you page 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 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 this stock, or take the dividends in money. Reinvesting will let you own more stocks, which leads 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. As a result 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 all the dividends on hold on to the stock for quite 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. To get a list of those shares, visit 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 years. Creditors and lenders can be matched up via 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 be able to qualify for a loan via a traditional bank. And in many circumstances the debtor he said gets a better interest rate than they might get from a bank. As an investor, you can earn a great return as well.