Most (or all) of us would love extra income, but few of us are eager to take on a second job in order to get it. Fortunately, there are other ways to get extra income -- including passive income.

Passive income is hard to beat because it requires little effort from you. Once you buy an annuity, for example, you can sit back and collect regular income from it. Using certain cash-back credit cards can deliver modest amounts of passive income, too. Dividends from stocks are one of the best kinds of passive income, with the stocks essentially paying you to own them.

A smiling person is holding some bundles of cash.

Image source: Getty Images.

Dividends: Not just for your grandparents

It's an error to just assume that dividends are for retirees who need income to live off of. Dividends can be terrific for investors of all ages. Imagine, for example, having a portfolio of dividend-paying stocks with a total value of $400,000 and an overall average dividend yield of 3%. That will kick out $12,000 to you each year -- or $1,000 per month, on average. That kind of money would be very useful in retirement, but if you're far from retirement, it can be $12,000 per year that you invest in more stocks -- on top of your regular saving and investing.

But wait, there's more! Dividends from healthy and growing companies tend to be increased, often annually, and sometimes by a lot. Starbucks, for example, has hiked its payout by an annual average of 18% over the past five years. Semiconductor specialist Broadcom, meanwhile, has upped its dividend by a whopping average annual rate of 48% over the past five years.

Favoring stocks with steep dividend growth rates is an effective dividend investing strategy -- so don't just grab the biggest yields you can find, because they may not be growing quickly and can be eclipsed by yields from faster-growing companies. (Significantly steep dividend yields can also reflect companies in trouble -- because when a stock's price falls, its dividend yield will rise.)

Some dividend-paying candidates for your portfolio

Here are some dividend-paying companies you might consider for your portfolio. As with any company, you want to look at more than just the dividend; you want the company to be of high quality and growing -- and you want it to be attractively priced.

Stock

Recent Dividend Yield

5-Year Avg. Annual Dividend Growth Rate 

AbbVie 

4.8%

18%

Automatic Data Processing

1.6%

12%

Cisco Systems

2.6%

7%

Clorox 

2.8%

8%

Coca-Cola

3%

4%

Corning 

2.5%

12%

Lowe's

1.4%

14%

PepsiCo

2.6%

7%

Starbucks

1.7%

18%

Verizon Communications 

4.9%

2%

Walgreens Boots Alliance

3.8%

5%

Waste Management

1.4%

7%

Data source: Yahoo! Finance and author calculations. 

There are gobs of other compelling dividend payers that can help plump up your portfolio over many years. Consider adding some to your mix, so that they can start paying you to own them.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.