Passive income is all about money making money 24/7. You know the famous make money while you sleep idea. It’s about buying money-producing assets and investing time to build products that generate income without future effort.
You can see regular passive income in the form of dividends from dividend stocks. Here, dividends are directly paid to you in cash, but you can reinvest the dividends. Large and well-established companies usually offer dividend-paying stocks
A bond ladder is a portfolio of multiple bonds that mature at different times. When the bonds mature, you can reinvest the returned principal in new bonds and start a new ladder or continue adding on to your current one.
You can earn passive income with interest when you loan money to someone else. For example, you can loan banks money in the form of a high yield savings account, and you can lend businesses money in the form of bonds. But you also earn interest when you loan money to peers.