Ask the Readers: What’s Your Favorite Income Investment?

by FI Fighter on May 9, 2015

in Ask the Readers

photo (7)

They say that interest rates are going to be going up soon… Until that day comes around, many yield starved investors are left searching far and wide, trying to find quality investments that can produce the type of passive income (cash flow) that they so strongly desire.

Over the years, I’ve done my own fair share amount of digging. I’ve invested in MLPs, telecoms, utilities, consumer products, etc., turnkey properties, and most recently, REITs, in search of high yield.

Although I’m a huge fan of appreciation (capital gains), bottom line, at the end of the day, it’s cash flow that pays the bills and puts food on the table. With that said, as I look to transition from an offensive player in the investing game to a more defensive one, you could say that finding suitable investments to regularly churn out passive income has been on my mind a lot.

At this point, I would like to ask readers — Regardless of market conditions, what’s your FAVORITE income investment to help you generate passive income (cash flow)?

To extend that question further — At this present moment in time, what are you investing in for income, and are income producing assets a main objective of your investment strategy?

Again, for myself, I tend to oscillate back-and-forth between investing for passive income and investing for appreciation. In a perfect world, I would like to be able to capture both!

Right now, due to what I feel is an overheated market (and due to the fact that I’ve taken more than enough swings during this bull run!), I’m looking primarily to stash cash… Nevertheless, if I do decide to make investments here and there, I would like to focus more heavily on investing in assets that produce passive income.

Here are some individual stocks that I am currently researching for income:

  • Realty Income (O)
  • Digital Realty Trust (DLR)
  • W.P. Carey (WPC)
  • Omega Healthcare Investors (OHI)
  • Health Care REIT (HCN)
  • AT&T (T)
  • Verizon Communications (VZ)
  • Kinder Morgan (KMI)

I could probably use a good utility company as well. I’ve owned The Southern Company (SO) before in the past, but haven’t followed up on utility stocks for quite some time…

At first glance, I’m back looking at mostly REITs, telecoms and utilities again. Right now, I like stocks because I would prefer to invest in a liquid vehicle that I could in theory Buy and Hold FOREVER… or at least for a long period of time.

I’m also targeting SAFE investments that can produce 100% passive income (no more rental properties… too much debt!)… For these income investments, capital gains and appreciation are of almost ZERO importance to me, as I’m relying on other investments to carry that burden.

Perhaps there are also some quality, high-yielding ETFs or index funds out there I should consider as well?

 

Let’s hear your thoughts!

{ 13 comments… read them below or add one }

1 Financial SamuraiNo Gravatar May 9, 2015 at 6:50 pm

Favorite income investment: my site, hands down. Great correlation with effort and income amount.

Real estate used to be my favorite income investment, but now it’s online web properties.

Reply

2 FI FighterNo Gravatar May 12, 2015 at 8:00 am

Sam,

That’s great that you’re site is doing so well, even better than rental properties.

I would love to be able to grow this site more in the upcoming future! 🙂

Cheers!

Reply

3 Financial SamuraiNo Gravatar May 13, 2015 at 1:02 pm

You can, and you will!

Reply

4 Money UnbindingNo Gravatar May 9, 2015 at 10:57 pm

Dividend growth investment is my current focus. I like your list of stocks and own some of them.

Writing puts is another option of my investment income. I am learning it and like it.

All the best,
MU

Reply

5 FI FighterNo Gravatar May 12, 2015 at 8:01 am

MU,

Thanks for sharing! I love dividend stocks as well and am now gravitating more towards utilizing covered calls and cash secured puts to generate additional income.

I will share more in a future post.

All the best!

Reply

6 No Nonsense LandlordNo Gravatar May 10, 2015 at 5:52 am

I like my rental income, but as I get ready to retire, I want to have an even more passive income stream. The RE has allowed me to build an incredible net worth (for me), and a solid 6-figure RE income stream.

I do not like REIT stocks, or Bonds, as I already own my own REITs and mortgage bond portfolio (my own paid off properties). Diversity is better.

I like mostly index ETFs (IVV, IVW, DVY, IWM, QQQ, FHLC). When I rollover my 401K to my own portfolio, i should be able to get ~$24K+ annually in dividend income. All the dividends will be reinvested while I live off rental income for a few more years. Plus, I should be able to save some of the rental income during this time.

Diversify, stick with lower risk investments, and keep some powder dry.

Reply

7 FI FighterNo Gravatar May 12, 2015 at 8:02 am

Eric,

I like the strategy of index funds and rental income. I’m attempting both myself, in additional to a custom stock portfolio comprised of individual stocks. I know that’s not for everyone, but I do like the flexibility and control it offers.

Take care!

Reply

8 bethNo Gravatar May 10, 2015 at 1:35 pm

VDY. The Canadian Vanguard high dividend ETF. Vanguard has only been in Canada for a few years but I started putting money in as soon as they got here.

Rental properties sound great but only if you are handy which I am not. I think that management fees must really eat in to profits,

Reply

9 FI FighterNo Gravatar May 12, 2015 at 8:03 am

Beth,

Sounds great! In the US I think we have VIG and VYM (high dividend yield) funds to work with from Vanguard.

I will definitely look to add those in the near future.

Yes, you’re right about management fees eating into returns. For my local properties, I self-manage to get around those expenses.

All the best!

Reply

10 tom dicksNo Gravatar May 10, 2015 at 7:00 pm

i own kmi and ohi loove them both but could not dicide between them i plan tokeep buying both
71 y/o stroke survior that had quit working at 59 y/o trying to fill the gap between ss and what is needed to pay the bills

Reply

11 FI FighterNo Gravatar May 12, 2015 at 8:04 am

Tom,

Great stocks there! Those will definitely help provide some solid income into your retirement years.

Thanks for sharing.

Stay strong!

Reply

12 ShunNo Gravatar May 12, 2015 at 12:02 pm

I’m itching to add more STWD , NLY and a few of the names mentioned on recent big market down days. Even as interest rate slowly rise in the the next few years (5-10), these names will continue to thrive hopefully.

Reply

13 jonNo Gravatar May 14, 2015 at 7:44 pm

PG, KO, JNJ, XOM are about as close as you can get to guaranteed income that grows faster than inflation. Those are the core of my portfolio.

Reply

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