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REIT dividends are not secured from hard financial times, either. If  Did you see this?  does not create enough income, it will likely need to cut its dividend or eliminate it totally. So your passive earnings may get hit just when you want it most. 9. A bond ladder, A bond ladder is a series of bonds that mature at various times over a period of years.

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A bond ladder is a traditional passive financial investment that has actually interested retired people and near-retirees for years. You can relax and gather your interest payments, and when the bond matures, you "extend the ladder," rolling that principal into a new set of bonds. For instance, you might begin with bonds of one year, 3 years, 5 years and seven years.

You can utilize the earnings from the just recently developed bond to buy another one year or roll out to a longer duration, for instance, an eight-year bond. A bond ladder gets rid of one of the significant risks of purchasing bonds the danger that when your bond develops you have to purchase a brand-new bond when rate of interest might not agree with.

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While Treasury bonds are backed by the federal government, business bonds are not, so you could lose your principal if the company defaults. And you'll wish to own many bonds to diversify your risk and get rid of the threat of any single bond injuring your overall portfolio. And if overall rates of interest rise, it might press down the value of your bonds.

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10. Purchase a high-yield CD or cost savings account, Investing in 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 greatest rates of interest in the country. You will not even have to leave your home to earn money.

And you'll still enjoy a guaranteed 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 purchasing a CD or cost savings account has to do with as safe a return as you can find.