What's easy and safe to invest in with residual income?
I’m looking for something that is easy and safe to invest in with a residual income that has a reasonable return. Anything like stocks or mutuals require you to sell before you realize a return, unless you are lucky enough to get something at the end of the year. Bank investments such as cds, bonds, etc, require waiting a long time before they are worth the face value, and the return rate is horrible. Savings and money market accounts are good as they provide that residual income each month, but the rate these days is a joke. About 5 years ago or so Pay Pal had their money market account which was earning about 7% so a person’s return wasn’t so bad, but now it’s .05%.
Does anybody have any information or help they can offer? Please, no responses of seeking a broker, professional, or my banker.
Tagged with: bank investments • bonds • face value • joke • long time • money market account • money market accounts • residual income • stocks
Filed under: Residual Income Models
Like this post? Subscribe to my RSS feed and get loads more!
If you can find yourself a stock that has a dividend yield above the rate of inflation you’ll actually be increasing your buying power as well as receiving a quarterly income. And generally, most stocks with dividends are considered very safe.
One of the best sources of residual income is real estate. If you can put enough down on a house to where the rental income covers the monthly payment on the mortgage, you’re building free equity and creating wealth for yourself.
You said "Anything like stocks or mutuals require you to sell before you realize a return,…" and you are wrong. Stocks give you dividends 4 times a year. And many mutual funds (bond funds) give you interest each month. You can get an annual return of 4.3% from the interest from a fund like Vanguard Intermediate Term Corporate Bond Fund. There are plenty of blue chip and utility stocks what give you 4,5 and 6+% per year in dividends.
Sounds like you’re looking for something with a good dividend.
I don’t like much in the U.S. market now because I think it’s going to crater soon. I highly recommend looking into ETFs in foreign countries. Australia is my favorite right now and Brazil is a strong #2. EWA and EWZ are good plays on these countries. I believe they pay around 4% dividend.
IAF is just like EWA but it pays about 7.5%. That’s the fund that I got my father into. The dividend is paid quarterly and the stock is very safe IMO. It may sell-off when the U.S. markets tank but it will come back strong because the Australian economy is much stronger than the U.S. economy. It’s also a good play on the Aussie Dollar vs. the U.S. Dollar.