Investing for incoming may be a very appealing prospect for many people. If you are focused on generating a larger nest egg then having a reliable stream of investment income can be very appealing as it removes uncertainty.
If you are approaching your retirement age, then income-generating investments are one of the best ways to have your portfolio pay you a little at a time instead of having to sell off assets for a large, lump-sum payment.
Here are the top ways to invest your money.
One common way to invest is via the bonds market. Bonds are a varied and complex asset class. They are essentially a loan, where you are the lender. There are government bonds and there are corporate bonds.
You need to be sure that you fully research the bond that you are investing in. This can be hard work. For this reason, many individuals who are investing will instead go for bond funds. Speak to an accountant such as Foley Giolitto CPA for advice before investing.
#2 Dividend Stocks
This type of investment is often riskier than bonds. This is because companies pay them out of their profits- and, even the most stable of companies can run into hard times and not have any profits.
Many people are willing to take this risk though, as it means that they are able to enjoy the potential regular payday along with the hope that they will see their investment grow.
#3 Preferred Stocks
This type of investment is a hybrid between bonds and stocks. They are less stable than bonds since the value of the stock can change due to market forces. In the event of bankruptcy, preferred shares will take a back seat to bonds, however, they are generally more stable than common shares.
Income investors like this type of investment because it does offer a much higher yield. As the name might suggest, preferred stocks cannot be just handed out to anyone.
#4 Asset Allocation Funds
Not sure how to invest your money? Then you may want to consider a one-stop investment fund that builds your portfolio for you.
#5 Real Estate
Another great way of investing your money is in real estate. This could mean buying a property and renting it out for an income, or investing in publicly traded real estate stocks.
#6 Nontraditional Sources
There are a number of different nontraditional sources that could help you to supplement your income potential if you are willing and able to seek these out.
You may want to participate in peer-to-peer lending where you will act as a banker and loan money to someone who is starting a business or improving their home. You could also consider forming a silent partnership in a local business.
All of these nontraditional investments require you to do your research. This is because they are not typical investments, however, they could be a useful source of diversification. In many cases, they will produce much greater income yields.