Income producing investments

[Bend it like Bourgeois]

I have a range of investments but they are all for retirement purposes. I'm happy with how all that is headed and fairly hands off on the whole thing.

Now I want to start to build investments for cash flow. Real estate is the obvious choice, but does anyone have experiences to share with dividend stock, income trusts, or ...i dunno...bonds? where you're actually spending the cash flow?

How does it work to actually get your money? Any issues to avoid? Any suggested plays?

[MoneyGuy]

I think Fotse is correct. If you're working and earning a good income, why do you need these things for income? The investments you mentioned are best when you let the dividends and other income roll back into the investment. I wouldn't recommend bonds right now; not the right time. Dividend stocks are an option, but as I said if you don't need the income leave them along to buy more shares. You haven't given enough info to provide good advice. How old are you, what incomes do you have, what is your timeline for the money? If you wish to send me a PM, I can give you more advice.

[photon]

One reason I can see to have incoming generating investments is to replace working income. Personally I'd love to be able to do what I want rather than what I have to do.. i.e. go back to school and become an astronomer or something, something that I want to do but pays crap, if I have investments to support my chosen lifestyle then I don't have to worry about the income.

Is it reasonable to think something like that can be accomplished with a normal person's income in a reasonable amount of time?

Or are more serious methods required.. business ownership / real estate / ??

[Ozy_Flame]

Time is your best investment, especially as you get older.

However, I'm sure there's plenty of ways to increase your cash flow if that's what you want. Invest in a startup, trade stocks...You could even buy an old car, fix it up and sell it for a small profit. There's plenty of ways to do it.

[Slava]

Most of the income producing investments (and strategies out there) are sustainable with a rate of withdrawal for about 4% per year. In other words if you have $100k put away you could withdraw $4,000 annually without fear of depleting this too fast. I have clients who use an 8% withdrawal rate and it is also sustainable, although obviously more risky in terms of a depletion of capital. If the funds are not registered then you can make this work with virtually nothing to pay for tax for many, many years.

That being said, this is a general comment based on producing an income. You would have to divulge how much you want to generate and how much you have to being with before anything intelligent could be given to you. You should also give some consideration to the amount of risk you are willing to take with these funds and how long you want this income stream to be available to you. I would suggest looking at something that is medium risk, diverse and tax advantaged. This would help you withdraw less to keep more money in your pocket and at the same time (hopefully, and generally) not keep you awake at night praying that your investments are still worth what you started with!

Let me know if this creates further questions or if there is anything else that I can do to help you out here!

[Bend it like Bourgeois]

We have a reasonable if unspectacular income and lifestyle, with a decent chunk of savings and a rate of savings that is plenty sufficient to make sure we'll retire like this at some point. Whether that's 50, 55, or 60 will depend on when my wife goes back to work (assuming life doesn't throw us some curveball), but it'll happen. I'm in my mid 30s and will be mortgage free (or close enough) in 5 years or so.

So my basics are covered (in my mind), and now I'm after the whole rich dad poor dad thing, which maybe people will tell me is dumb, but it made sense to me.

As my income rises and I start to have more free cash, I don't just want to increase my lifestlye to spend it away.

For example I'd rather take 100k or whatever and have that generate income that pays for a luxury I want like a nicer car or fancy vacation, instead of blowing the 100k or a good portion of it on the luxury itself.