If you have a lot of money, you want to not only keep it safe. You’d like to potentially park it somewhere that it can grow for you over time so that you generate even more wealth. However, depending on your circumstances, and if you have enough money, you might be able to actually invest it in such ways that you can go about investing for income. That way, your net worth is kept relatively intact, and perhaps grows over time, but also gives you payouts once in a while. Does it sound like the best of both worlds? Does it sound too good to be true? It’s not, because there are several different ways that you can go about doing this.
The first thing that you can do is look into investing in dividend stocks. These are also sometimes called ‘blue chip’ stocks. They’re typically huge companies that dominate the Dow Jones index, corporations that survive recessions and are household names. Stocks that are dividend stocks typically pay out a portion of their profits to their shareholders on a regular basis, often quarterly, for each share of stock that they hold. This is just like getting income for owning shares.
On a similar note, you could invest in bonds. Corporate and municipal bonds float money to organizations, governments, establishments, and businesses that need capital for growth and expenses, and in exchange, they pay the bondholders back fixed amounts with interest over time. These payments get you money in regular intervals, just like dividend stocks. They’re not usually as profitable, but the payments are typically more regular and less variable.
Real estate is another way to invest for income. Owning a property, be it commercial or residential, means tenants in the home or building you own would pay you rental income for being allowed to stay in the property in question. If you’d like to get rental profits without having to be a full owner on your own or part of a group, look into REITs, which are real estate income trusts, a kind of mutual fund that pools money together from many and divides the profits just as equally.
For that matter, you can always look into just buying an annuity. Depending on how it’s structured and the terms and conditions, your sum of money can be turned into monthly payments that you get for a set number of years or even the rest of your life.
Here is some information on how banks affect the economy from The Income Generation.