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Published May 28, 21
4 min read

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Once your app is public, users download it and you can generate income. An app has huge upside, if you can design something that catches the fancy of your audience. You’ll have to consider how best to generate sales from your app. For example, you might run in-app ads or otherwise have users pay a nominal fee for downloading the app.



The biggest risk here is probably that you use your time unprofitably. If you commit little or no money to the project (or money that you would have spent anyway, for example, on hardware), you have little financial downside here. However, it’s a crowded market and truly successful apps must offer a compelling value or experience to users.

The popularity of apps can be short-lived, too, meaning your cash flow could dry up a lot faster than you expect. 8. REITs, A REIT is a real estate investment trust, which is a fancy name for a company that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders.

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You’ll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time. Like dividend stocks, individual REITs can be more risky than owning an ETF consisting of dozens of REIT stocks.

Just like dividend stocks, you’ll have to be able to pick the good REITs, and that means you’ll need to analyze each of the businesses that you might buy — a time-consuming process. And while it’s a passive activity, you can lose a lot of money if you don’t know what you’re doing.

REIT dividends are not protected from tough economic times, either. If the REIT doesn’t generate enough income, it will likely have to cut its dividend or eliminate it entirely. So your passive income may 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 investment that has appealed to retirees and near-retirees for decades. You can sit back and collect your interest payments, and when the bond matures, you “extend the ladder,” rolling that principal into a new set of bonds. For example, you might start with bonds of one year, three years, five years and seven years.

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You can use the proceeds from the recently matured bond to buy another one year or roll out to a longer duration, for example, an eight-year bond. A bond ladder eliminates one of the major risks of buying bonds – the risk that when your bond matures you have to buy a new bond when interest rates might not be favorable.

While Treasury bonds are backed by the federal government, corporate bonds are not, so you could lose your principal if the company defaults. And you’ll want to own many bonds to diversify your risk and eliminate the risk of any single bond hurting your overall portfolio. And if overall interest rates rise, it could push down the value of your bonds.

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10. Invest in a high-yield CD or 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 also get one of the highest interest rates in the country. You won’t even have to leave your house to make money.

And with the Federal Reserve targeting 2 percent inflation, you’re likely to lose out to inflation in the short term at least. Nevertheless, a CD or savings account will yield better than holding your money in cash or in a non-interest bearing checking account where you’ll receive approximately zero. 11.

If you’re going away for the summer or have to be out of town for a while, or maybe even just want to travel, consider renting out your current space while you’re gone. You can list your space on any number of websites, such as Airbnb, and set the rental terms yourself.

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You don’t have a lot of financial downside here, though letting strangers stay in your house is a risk that’s atypical of most passive investments. Tenants may deface or even destroy your property or even steal valuables, for example. 12. Advertise on your car, You may be able to earn some extra money by simply driving your car around town.

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