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REIT dividends are not safeguarded from hard economic times, either. If the REIT doesn't generate sufficient earnings, it will likely need to cut its dividend or remove it entirely. So your passive income might get hit simply when you desire it most. 9. A bond ladder, A bond ladder is a series of bonds that fully grown at various times over a duration of years.

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A bond ladder is a traditional passive investment that has appealed to senior citizens and near-retirees for decades. You can kick back and collect your interest payments, and when the bond matures, you "extend the ladder," rolling that principal into a brand-new set of bonds. For instance, you might start with bonds of one year, three years, 5 years and seven years.

You can use the profits from the recently matured bond to buy another one year or roll out to a longer period, for instance, an eight-year bond. A bond ladder eliminates one of the major threats of purchasing bonds the threat that when your bond matures you have to buy a new bond when rate of interest might not be favorable.

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While Treasury bonds are backed by the federal government, corporate bonds are not, so you could lose your principal if the business defaults. And you'll want to own many bonds to diversify your risk and eliminate the threat of any single bond harming your overall portfolio. And if overall rate of interest rise, it could lower the value of your bonds.

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10. Check For Updates in a high-yield CD or cost savings account, Buying a high-yield certificate of deposit (CD) or savings account at an online bank can allow you to generate a passive income and likewise get among the highest rates of interest in the country. You won't even have to leave your home to earn money.

And you'll still take pleasure in an ensured return of principal up to $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.