I want my money now! In fact, I want to create as many paychecks as possible throughout the month. This concept is the basis of becoming an income investor.
I have been preaching about the woes of inflation for over a year now (Inflation is Coming, Prepare for Inflation). Now, it’s here, and I am growing my income every month thanks to my high-yield investments.
Income for life. The order flow of income investing is to produce as many paychecks from the stock market as possible. Once you receive these dividends, you evaluate what you have going on in life.
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If you don’t need that cash in the next few days or weeks, you reinvest it into more high-yield securities. Next month, you’ll have an even bigger paycheck.
I would love to say it is more complicated than this, but I’d be trying to make myself sound brighter than necessary. The concept is easy to understand and execute—let’s look at one of my income streams.
A quick example. Here is a small snapshot from my Wells Fargo brokerage account. First, you’ll see four bond closed-end funds (PDI, PTY, PDO, NVG) and then a high-yield finance mutual fund (ARTFX).
They pay me $108 on the 1st of every month. That’s right, as my paycheck from the military, they pay me on the first.
Fundrise vs. USDC
Thus, each month, I evaluate what I have going on in life. Most times, I have enough money to survive, so I re-invest into more products across this account.
Income Investing vs. Inflation. In good times, it’s easy to keep reinvesting into more stocks and funds. However, we are now going through inflationary times.
Gas and food prices fluctuate on a weekly or even daily basis. I need to have more paychecks throughout the month to keep up with the changes.
It’s a good thing I have $900 plus dollars coming in all month to handle inflation. Let’s take a look at my Cash App dividends from last month.
Look at all those juicy dividends. I receive these directly to my Dividend Debit Card on the Cash App. You can see some mega dividends such as $39, $27, $31, $52, $25, and $15. Not to mention even the little dividends help throughout the week.
From Dirt to Dividends 3
Price at the pump. Can you imagine getting a nice $39 dividend as you pull into the gas station? That’s the life I live along with my wife. She also has a dividend debit card with Cash App.
My wife talks to people who struggle with finances. She understands how much dividends affect our life and well-being. Dividends can genuinely change your life.
Income Investing vs. Dividend Growth Investing. Do not confuse dividend growth investing (DGI) and income investing. After investing in dividends for over three years, I believe everyone should start as income investors.
DGI portfolios are for long-term financial health and well-being. It is for having a nice retirement and leaving generational wealth. Income investing is about getting paid today!
How We Plan to Retire on Dividends 3
If I invest $1,000 in a DGI portfolio, I would expect to see the seeds of this investment grow over 20-30 years. I would invest in blue-chip companies like Public Storage (PSA), McDonald’s (MCD), Johnson & Johnson (JNJ), and Costco (COST).
If I invest $1,000 in an income portfolio, I expect a 10% return from companies and funds like Pimco Funds (PDI, PTY) and AGNC (AGNC). The following month I would receive an $8 paycheck to my account.
If you think $8 is a small amount of money, you are missing the point of income investing. That is $8 that you did not have to work to generate.
Dividends vs. Social Security
If you don’t need that $8, you can reinvest it back into the account. Or, you can buy a couple of Snickers ice cream bars at your local gas station.
If you keep investing $1,000 into your account over the next two years, your $8 income stream will be $200. Now that is some serious cash flow.
Getting started with income investing. I got into income investing by reading Rida Morwa on SeekingAlpha. He makes so much sense that it’s hard not to accept what he says.
As you slowly become an income investor, you’ll see how different you are from other investors. I am not investing for capital gains. I am creating paychecks—tons of them.
Happy Cash Flow Retirement 7
I will write a step-by-step guide to becoming an income investor soon. You do have to research things like bonds and real estate investment trusts, but that is part of the fun.
In the meantime, this book will help you understand “The Magic of Income Investing (Free PDF).” Income investing is similar to investing in fixed-income, with some quirks. If you like bonds, income investing may offer a similar thrill.
Conclusion. How do you want to roll up to the gas station—broke or with a pocket full of dividends? I choose to have my investments pay for my lifestyle.
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It may be tough to set aside some cash flow to invest into income-producing assets now, but it’s time. How long do you want to struggle with your finances?
Wouldn’t it be nice to earn some paychecks without putting in the hours? Life is about choices. I chose to invest in income because these paychecks have set me free from stress and worry.
How do you want to spend the next 2-4 years of inflation? Do you want to struggle with the rest of the 95% of Americans that are underwater? Or do you want to get ahead by learning the art of income investing? Life is about choices.
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