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At first 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 that you could quit your job or retire .
In some circumstances youll need to put in some effort up front, but then it wont need just 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 like blogging, writing e-books, or creating your own course. Im not including those ideas 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 constantly 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 supply in order to continue to create 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 get it done.
Ive been blogging fulltime for ten decades and Ive sold ebooks and classes in the past. Theyre great ways to earn money, I just dont consider these to be more passive, in most cases. .
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Just about 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. This opens up even more possibilities than that which will be listed here.
Now lets take a peek at some of the greatest ways to make passive income. Some of these are investments which will require some money to start with. Other folks wont require any money to begin. In case you dont get redirected here have the money to invest now, try 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 that 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 better return for you.
My wife and I keep our emergency fund in a money market account with CIT Bank. At the view 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 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 purchase more shares of the inventory, or take the dividends in cash. Reinvesting will let you 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 history of success. Because of this, these investments tend to be considered less risky than the stock exchange in general.
Dividend stocks can be a terrific investment regardless of whether you want to reinvest each the dividends on hold on to the stock for quite a long time, or make use of the income produced throughout the dividends.
For much more detail on the topic read Investing in Dividend Stocks at Investopedia. For a list of these 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 decades. Creditors and lenders can be paired up via a website or marketplace. Instead of going to a bank, the debtor gets a loan from an investor.
In some cases the borrower might not visit this page be able to qualify for a loan through a traditional bank. And in many circumstances the debtor gets a better interest rate than they could get from a bank. As an investor, you can earn a good return as well.