[header] How to generate passive income [title] Decide to invest in dividend stocks. [step] Dividend stocks pay out a portion of the company's profits to shareholders. These dividends are paid at regular intervals, so they produce a regular income stream. 
Investors who hold a large amount of this type of stock are known as " income investors " because they prioritize regular dividends over stock value growth. [substeps] Dividends do not necessarily lower the risk associated with investing in the stock market.