The dream of many small savers and investors is to obtain a monthly income from their investments so they can supplement their salary or pension.
This scenario, as complex as it may seem, does not require multimillion-dollar investments, but can be achieved by anyone. In fact, there are a number of tools and strategies that enable people to obtain a monthly income from their investments.
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Advantages of investments with monthly returns
Obtaining monthly returns from one’s investments, has numerous advantages including the reassurance of an extra and more or less regular income. Which can greatly simplify life when planning medium-term financial transactions.
Other advantages, however, relate to the payment and management of fixed expenses, such as mortgages, rent, etc.
However, not all investments are suitable for the purpose of earning a monthly income. So here are the best investments to generate a monthly income.
The best investments to generate a monthly annuity
The best ways to generate a monthly income from one’s investments are rents, stocks with monthly dividends, bonds with monthly coupons, investment funds with monthly dividends, pension funds and life insurance policies.
Real estate is one of the best investment sectors for producing monthly income, particularly with rentals. The rental market can in fact provide regular income in the short, medium and long term, through one or more tenants.
One of the advantages of this type of investment is that it does not necessarily require a great deal of initial capital. In fact, in order to be able to manage rentals, it is not necessary to own the property. But you can proceed either during the purchase phase, thus using the income generated by renting out the property to pay the mortgage, or when you have a rental home.
Put very simply, the basic requirement for being able to generate income from rentals is to have a property, whether owned or rented. This property will be put up for rent or sublet. Either permanently or through tools such as Airbnb that allow short-term rentals.
Stocks and bonds with monthly dividends
If you want to earn a monthly income through investments in stocks or bonds, you should carefully select the stocks to invest in. Thus choosing stocks that offer monthly dividends and coupons.
Stocks with monthly dividends are very few. Among them one of the best known is Realty Income. Which has become famous precisely because of its branding in which it promotes monthly dividends from its stocks.
Other stocks with monthly dividends are EPR Properties, SL Green and Pembina Pipeline.
Pension fund or supplementary annuity
Not everyone knows that pension funds can also be redeemed in the form of an early temporary supplementary annuity or RITA.
With a supplementary annuity, it is possible to obtain a monthly annuity. Thus derived from your pension fund, before you even have access to a pension. This instrument can therefore be activated while you are still working.