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REIT dividends are not protected from hard economic times, either. If the REIT does not produce sufficient income, it will likely need to cut its dividend or remove it completely. So your passive income may get strike just when you want it most. 9. A bond ladder, A bond ladder is a series of bonds that fully grown at different times over a period of years.

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A bond ladder is a traditional passive investment that has actually attracted retired people and near-retirees for decades. You can kick back and gather your interest payments, and when the bond develops, you "extend the ladder," rolling that principal into a new set of bonds. For  Also Found Here , you might start with bonds of one year, three years, five years and 7 years.

You can utilize the proceeds from the recently grown bond to buy another one year or present to a longer duration, for instance, an eight-year bond. A bond ladder removes one of the significant dangers of buying bonds the danger that when your bond matures you have to buy a new bond when rate of interest may not agree with.

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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 lots of bonds to diversify your risk and remove the threat of any single bond injuring your total portfolio. And if overall rate of interest increase, it might lower the value of your bonds.

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10. Buy a high-yield CD or cost savings account, Buying 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 among the highest rate of interest in the nation. You won't even have to leave your home to make cash.

And you'll still take pleasure in a guaranteed return of principal as much as $250,000, if your banks is backed by the FDIC. As long as your bank is backed by the FDIC and within limits, your principal is safe. So purchasing a CD or cost savings account is about as safe a return as you can discover.