Income Investing

Broadly speaking, income investing is a strategy that focuses on income return ahead of portfolio growth. Understanding our approach to income investing starts with knowing a simple formula: TR=I+G. That stands for, “total return equals income plus growth.” Contrary to popular belief, “return” and “growth” are not one-and-the same. It’s not that simple. Total return is a sum of both growth and income. Growth is measured in capital appreciation while income comes in the form of interest and dividends.

What are My Income Investment Options?

We help you shift your focus from growth to income (from “the G to the I”), ideally during the transitional stage five-to-ten years before retirement. That’s when your financial priorities should be transitioning from accumulating assets to generating income. We can help you make the shift smoothly with a strategy that is aligned with your retirement goals, right for your risk tolerance—and gives you a broad range of investment options.

These options include:

  • Conservative, fixed-income tools such as individual bonds and bond-like instruments. Many of these options are designed to protect your principal from loss and generate income at a fixed rate regardless of market conditions.
  • Less conservative tools such as preferred stocks, REITs, BDCs and dividend ETFs.
  • And somewhat riskier options such as high yield dividend stocks.

What Is The Best Investment Plan for Monthly Income?

The goal of income investing is to generate annual income sufficient to meet your needs and goals for up to 30 or more years of retirement. Some tools generate income on a monthly basis and some quarterly. The plan that’s best for you depends on your individual goals and risk tolerance level, in addition to several other factors. These include your age, total assets, and other sources of retirement income, including Social Security. Unlike many growth-based advisors, we don’t use “cookie-cutter” investment strategies. Ours are tailored specifically to each client, and actively managed to account for changes in your life—and changes in the financial markets, of course. The goal of every strategy is to maximize your income return and strategic growth potential in a way meets your needs and is right for your risk tolerance.

Does Income Investing Require Sacrificing Growth?

The simple answer is “no”. Shifting your strategic focus from growth to income doesn’t mean sacrificing growth; it only means achieving growth more strategically. Rather than crossing your fingers and hoping for capital appreciation, you instead achieve growth through the strategic reinvestment of any interest and dividend return you don’t need for income. We call this “organic” portfolio growth, and our strategies allow you to achieve organic growth whether you’re investing very conservatively in only bonds and bond-like instruments, or more aggressively in things like REITs, preferreds or dividend stocks.

If you’re retired or nearing retirement age, we can help you create a comprehensive income strategy geared directly toward your individual needs and goals—starting today! Don’t wait another minute to take charge of your financial future. Contact us now to speak to one of our income specialists in your area.

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