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REIT dividends are not protected from tough financial times, either. If the REIT doesn't produce sufficient income, it will likely need to cut its dividend or remove it totally. So your passive earnings might get strike simply when you want it most. 9. A bond ladder, A bond ladder is a series of bonds that mature at different times over a duration of years.

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A bond ladder is a classic passive investment that has interested retirees and near-retirees for years. You can kick 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 may begin with bonds of one year, 3 years, 5 years and 7 years.

You can utilize the profits from the just recently matured bond to buy another one year or present to a longer duration, for example, an eight-year bond. A bond ladder eliminates among the significant dangers of buying bonds the threat that when your bond matures you need to purchase a new bond when interest rates might 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 want to own lots of bonds to diversify your threat and remove the threat of any single bond hurting your total portfolio. And if general rates of interest rise, it might press down the worth 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 enable you to create a passive income and likewise get one of the greatest rates of interest in the nation. You will not even need to leave your house to earn money.

And you'll still enjoy a guaranteed return of principal approximately $250,000, if your banks is backed by the FDIC. As I Found This Interesting as your bank is backed by the FDIC and within limitations, your principal is safe. So purchasing a CD or savings account is about as safe a return as you can find.