Spending your money by investing it in a business is one of the wisest moves a person can do to be financially productive. It is one way of waging your self. What more could you ask for upon gaining profit from your investment? Imagine your self continually receiving good investment income; you don’t have to worry when your money is making you out.
Investment income is an income coming from various sources such capital gains, dividends, interest payments and other returns from the investment made by the individual or business. To get the investment income, the investment should get higher revenue than the original assets invested to secure an asset.
One concrete example, for you to understand the concept is the interest you gain in opening a savings account. You will acquire investment income by earning interest added to your balance on your bank account. You may earn this annually or quarterly depending on the provisions of your bank.
There are three types of investment income. These are sources for you to generate investment income at its best.
1. Predictable Investment income. This is interest income from dividend income and bonds paid by stocks. Use these sources to supplement the guaranteed income by buying dividend and interest paying investments directly.
2. Variable Investment income. Building an overall portfolio including cash, equities and fixed income can help you to create longer years to of investment income. The safest part of your portfolio is the fixed income and cash that you have while the equities is the growth of the portfolio. They will help you generate investment income through interest.
3. Guaranteed Investment income. This is an income either generated by the government or by an insurance company. Such investments like treasury securities, fixed annuities, certificates of deposits are the rudiment sources of guaranteed investment income.
However, if you want to purchase additional guaranteed income:
• Purchase an annuity
• Purchase a higher social security future benefit amount
• Inquire at your employer for you to purchase years of service to get higher benefit
Guaranteed investment income helps you to have the best foundation for an ultimate retirement income strategy.
If you are unsure of what you are earning and you want to check and re-check your gain, you can calculate your investment income. First, gather all necessary information and pull out all the recorded data of all your investments. Track the records and understand the equation for computation and look for the percentage of return which is what we call yield. For you to have a better comprehension of your data, open Microsoft excel and put all the necessary information in different columns where it belongs.
Do not be afraid to invest. You will never know what you can have if you won’t try. As you can see, most of our successful businessmen started to be young investors and yet they gained and they succeeded. Be inspired and be encouraged to invest while you can.