Most people when asked today are either floundering in debt or asset rich and cash poor. This is because most of the funds and plans that people invest in are usually capital appreciation instruments. This means that you can make money due to the difference in the buying and selling price of the instrument, in tax terms we know this as capital gains. So, while you are invested in the instruments, you do not make much with the exception of dividends issued either once or twice a year for mutual funds or quarterly for most dividend-paying equities.
This post will therefore introduce you to three common cash flow generating instruments that can help you generate such cash for your investment portfolio.
REITs
‘REITs are also known as Real Estate Investment Trusts are basic instruments that allow individuals to get a stream of income from the rental income of the properties after the management companies deduct their operating expenses to manage the properties. Yields may vary between classes of properties, and you buy the shares in the REITs and have a share of the rental income. Spend time looking at the return of the REIT and the properties portfolio to decide if that REIT is for you to invest in. Avoid REITs with overly high management fees since it’s not in your best interest. The average REIT yields 2.9% that is over double the S&P 500’s 1.3% yield, for more visit https://www.kiplinger.com/investing/reits/603944/the-12-best-reits-to-buy-for-2022.
MANAGED FOREX
Forex Managed Accounts represent another income stream if you are not into Forex Trading yourself. Some banks and large financial institutions have Forex Traders trading on your behalf, and they can give you certain fixed monthly returns each month. Look for companies that have good money management strategies and look at some of their returns before investing in these companies. But that said in Forex the risk comes with a great reward, and also can result in large losses, so do consider Forex Managed Accounts a possible investment alternative. While I am not very knowledgeable about these you can learn more about them from, https://www.fxempire.com/brokers/best/managed-account.
OIL TRUSTS
Oil Trusts work like real estate investment trusts, except that the amount that you get is dependent on the price of oil. You are basically sharing the oil proceeds with the oil field and each month they calculate the price of oil sold and you get a share of that. This means that you will earn more in a month where the price of oil is high. Thus, the best time to invest in these more exotic investments is when the price of oil is low, and you can purchase more shares of the oil field at a lower price. While oil prices are higher than at times last year, here is a list of some oil trusts, which an average yield that is currently 6.43%, visit https://stockmarketmba.com/listofroyaltytrusts.php.
In conclusion, it’s not all and gloom in investment land. Spend some time looking and shopping around for cash flow generating money-making investments to balance your investment portfolio so that you will not end up asset rich and income poor. There are also some Exchange Traded Funds that also will exhibit some capital appreciation and pay monthly dividends as well and from my experience, most are invested in financial institutions. Even better, take your capital gained from your other instruments and then slowly place them into real estate of your own and generate even more cash each month to spend.
For more information or if you need assistance feel free to reach out to me directly if you are in or near the Metro Nashville area. While I am able to assist you no matter where you are, you can also seek out a qualified fee-only Registered Financial Consultant near you.