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REIT dividends are not protected from hard economic times, either. If the REIT doesn't produce sufficient earnings, it will likely have to cut its dividend or eliminate it completely. So your passive income might get hit just when you want it most. 9. A bond ladder, A bond ladder is a series of bonds that mature at different times over a period of years.

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A bond ladder is a classic passive financial investment that has interested senior citizens and near-retirees for years.  I Found This Interesting  can sit back and gather your interest payments, and when the bond grows, you "extend the ladder," rolling that principal into a new set of bonds. For instance, you might start with bonds of one year, three years, 5 years and 7 years.

You can utilize the profits from the just recently grown bond to buy another one year or present to a longer period, for example, an eight-year bond. A bond ladder eliminates among the major threats of buying bonds the risk that when your bond matures you have to buy a new bond when interest rates might not be beneficial.

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While Treasury bonds are backed by the federal government, business bonds are not, so you might lose your principal if the business defaults. And you'll wish to own numerous bonds to diversify your risk and eliminate the threat of any single bond hurting your general portfolio. And if overall interest rates rise, it might lower the worth of your bonds.

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10. Buy a high-yield CD or cost savings account, Investing in a high-yield certificate of deposit (CD) or cost savings account at an online bank can permit you to generate a passive income and likewise get one of the greatest rate of interest in the country. You will not even need to leave your house to earn money.

And you'll still delight in a guaranteed return of principal approximately $250,000, if your banks is backed by the FDIC. As long as your bank is backed by the FDIC and within limitations, your principal is safe. So investing in a CD or cost savings account has to do with as safe a return as you can find.