5 Surefire Ways to Generate Passive Income

Just about all of us could use extra income. Retirees may not have enough coming in from Social Security and their savings or investments, and those still working may not have as much money available to save and invest as they need.

Enter passive income. If you can set up some streams of passive income, it can have more money flowing into your coffers — with little to no work required by you. Passive income is hard to beat.

Image source: Getty Images.

Here are five ways you might generate passive income.

1. Dividends

This is an obvious — and extremely effective — way to generate passive income. Buy a bunch of dividend-paying stocks and watch the dollars roll in, typically every quarter. A portfolio with a total value of, say, $300,000, and an overall dividend yield of, say, 4%, will generate $12,000 in annual income.

With the market in a slump these days, many stocks are down sharply, which pushes up dividend yields. Here are some recently available yields:


Recent Dividend Yield

Verizon Communications




W. P. Carey


Walgreens Boots Alliance




Realty Income








Cisco Systems 


Source: Yahoo! Financial.

2. Annuities

Annuities can be another great source of dependable income, and fixed annuities are the least problematic variety. With an annuity, you typically hand over a hefty sum to an insurer, and in return, you’re promised regular payouts that can last as long as you — or you and your spouse — are alive. The promise is only as robust as the insurer, so favor highly rated annuity providers.

As an example, a 65-year-old man might get around $650 per month with a $100,000 policy, at recent rates. That’s about $7,800 per year. A 65-year-old mixed-gender couple might expect around $1,150 per month with a $200,000 fixed annuity purchase — about $13,800 per year.

3. Interest

This passive-income-generating strategy hasn’t been worth…

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