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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 faster. But with a few time, its potential to make enough passive income you could quit your job or retire early.

Passive income can be a small divisive topic. In general, passive income is any money that you make without putting in much work. The money will flow in without too much being demanded of you. In some scenarios it might be long-term recurring income, and in other instances it could be short lived or inconsistent.

In some cases youll need to put in some effort up front, but then it wont require as much effort in the future when youre making the money.

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 thoughts in this post because, in my own opinion, all of them 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 from others 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 create sales. It is possible and there are people who have been in a position to get it done passively, but they make up a small percentage of individuals who really set out to do it.

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 more 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. That 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 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 get started. If you dont have the money to invest now, consider starting with the approaches that dont require any money, and then utilize that money that you earn to invest. .

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Your very first financial priority should be to develop an emergency fund that will cover all your living expenses for a few months. But dont put this money would be a checking account 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 1.85percent 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 to their shareholders. As a trader, you can re-invest the dividends to buy more shares of the stock, or take the dividends in cash. Reinvesting will let you own more shares, which leads 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 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 use the income generated through the dividends.

For much more detail on the topic read Investing in Dividend Stocks at Investopedia. To get a list of these stocks, 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 paired up through a site or marketplace. Instead of going to a bank, the debtor gets a loan from an investor.

In some situations the borrower might not be able to be eligible for a loan via a traditional bank. And in many cases the debtor gets a much better interest her explanation rate than they could get from a bank. As an investor, you can earn a good return as well.