Investing for Cash Flow Build a Stream of Income. You can use interest bearing accounts to build a stream of income for cash flow. The cash flow can be used to pay for retirement expenses, pay for your living cost or save for the future.
You can use different investments to produce income or cash flow.
Advantages of Municipal Bonds
Free from Federal Taxes.
Free from State and Local Taxes.
Tax Advantaged Compound Growth and/or Income.
Lower Volatility Than Stocks (Fixed Income Assets).
High Level of Liquidity.
Exchange Traded Fund that invest in multiple companies that payout the highest dividends.
Buying your own stocks and managing them yourself.
Key Advantages to Dividend Investing
Shareholders and Investors that accumulate a portfolio of dividend-paying stocks or ETF Funds over many years will build up a large number of shares. As years go by, your in dividend income will expand to 0, then grow to ,000 and more. It will accumulate. Those dividends that are paid out, will grow into more equity in your stock or ETF if the dividend is reinvested.
Advantages of Dividend ETF Funds
1. Save Time – Individual Stocks take more time in managing and monitoring.
2. Diversified – Many of the ETF funds will invest in 50 companies or more and if one individual company drops dramatically in price, this will not hurt you.
3. There is less time in analyzing which stock you should add additional money to your portfolio.
4. More advantageous to the small investor.
5. Less Commissions
6. Stock Market Risk may be less.
Advantages of Buying Individual Stocks for Dividend Payout.
1. You can customize the returns and sectors.
2. You can change a stock in your own portfolio if you feel it is not performing.
3. Higher Total Return can be achieved.
There are advantages and disadvantages to both strategies. The most important thing is to get started.
If you are a new investor, the ETF Strategy would be the easiest strategy to implement.
If a person has the time to manage and monitor individual stocks and has the experience and know-how, then individual stocks can work the best.
Dividend growth investing is an excellent long term strategy that works.
Investing for Cash Flow Build a Stream of Income