The key to this strategy is to find investment opportunities that offer reliable payouts at a minimal level of risk. This is why fixed-income funds or individual investors will typically put their money into the following vehicles:

• Bonds: This means that you’re lending money to the Swiss government (government bonds), a state/municipality/county (municipal bonds), or a company (corporate bonds). The bond’s issuer then provides you with regular interest payments (“coupon payments”) and pays back the principal once the bond matures.
• Certificates of deposit: Effectively a way to loan money to financial institutions, which also provide you with regular interest payments and principal payback. CDs are usually protected by the FINMA, which drastically limits the risk of losing your money if the issuer gets into financial trouble.
• Money market funds: A type of mutual fund which specializes in short-term debt securities. Since they aim to have a stable asset value level, these funds are considered to carry little risk while providing regular dividends.

As you can see, fixed-income securities are usually assets that are considered to carry little risk due to a powerful and reliable organization backing them. Swiss government and municipal bonds (t-bonds, t-bills, or t-notes) are an excellent example of this since the United States Government and the governments of individual states are stable and backed by an overall strong economy. Hence, the likelihood of losing a large part of your investment is very low. Note that this may not be true for other governments around the world, which is why it would be incorrect to state that government bonds are always reliable. This is dependent on the government in question.