What to do with the $300,000 you saved over a few years? Can you generate a middle-class wage by investing this amount and using only dividends? What is the best investment option?
If you have managed to save your hard-earned money, it’s entirely possible to get a decent dividend stream with $300,000. You only have to choose the right income generators – and here are the top three!
With these income generators, you can invest $300,000 and get a 10+% dividend stream, meaning you can generate around $2,450 each month.
Also, they could be a good option if you’re looking for quick earnings, since these assets pay dividends monthly, so you only have to wait 30 days to start getting income.
The best part? You don’t have to buy assets in risky, small companies, speculative investments, or toxic financial derivatives that can make you lose money.
If you want to add global diversification to your portfolio and have a decent dividend, Clough Global Opportunities Fund (GLO) may be a good option.
It usually offers a huge payout, delivering a strong total return of 62.6% in price gains and dividends by 2021. Now, it offers a hefty 12.33% dividend.
While many don’t believe that the payout they can get from GLO is huge due to its high dividends, the fund has boosted it by over 23%. Also, further increases in its year-to-date performance are expected.
GLO portfolio was smartly positioned as the global economy began to recover, with its biggest positions in Micron Technology (MU), Royal Caribbean Group (RCL), and Carnival Corp (CCL).
#2 Nuveen Credit Strategies Income Fund (JQC)
Today, Nuveen Credit Strategies Income Fund (JQC) pays over 11% in current dividend yield, becoming one of the best options in the investing world for those who want to obtain a decent income from $300,000.
JQC also holds corporate bonds. However, it invests in adjustable-rate loans, which tend to increase in value at higher interest rates.
Over the past few years, JQC’s management team has vastly outperformed if the total return that its portfolio earned is compared to the variable-rate loan index.
However, this fund often trades for less than what its portfolio is worth.
JQC usually gives investors solid gains with an 11% dividend thanks to its market price, and it’s expected to continue to rise, giving more profits and a potentially massive payout to investors.
#3 Eaton Vance Limited Duration Income Fund (EVV)
This 12.5%-yielding corporate-bond fund invests in shorter-duration bonds. Therefore, if you put your money into EVV, you’ll be exposed to a company for a limited time.
Consequently, EVV’s management can shift from one firm to another that seems more compelling at any time.
Furthermore, EVV is well positioned in the US housing market, so you can be sure that your hard-earned money will go to well-known and reliable companies.
Its corporate positions also include bonds from well-known firms, such as Caesars Entertainment and T-Mobile. Both experienced a recovery after the US began to reopen following the health crisis, benefiting EVV’s price gains in recent years.
Why Invest $300,000 in Passive Income?
If you take a look at wealthy people’s history, you’ll see that they don’t go out and work every day for a monthly income. Actually, they manage to get their money to work for them.
What do these people do to earn money even if they don’t have a salary or work every day? Here’s the short answer: passive income.
These are some of the main reasons why you should invest in passive income:
It’s a great option if you want to enjoy early retirement since you can cover your expenses even if you haven’t reached the golden age. Working is optional!
You won’t depend on Social Security benefits but will have passive retirement income to enjoy a better quality of life.
Investing for passive income reduces dependency on a job!
There’s no high-stress job, but you can do what you love while earning money.
You can live anywhere. Actually, in many countries, you can live comfortably for just $2,000 a month.
It’s a great strategy to build wealth quickly, especially if you save or reinvest your extra income.
You can choose “set and forget” options to enjoy stress-free passive investing.
There are many online investing platforms nowadays, so you can get started with just a few clicks.
You don’t need a high initial investment to start.
Best Sources of Passive Income
Now that you know how amazing passive income can be, it’s time to check out the best sources! Here are some alternatives you can consider:
Dividend-Paying Stocks and Funds
As the three income generators mentioned above show, dividend-paying funds or stocks can be good options for those who want to earn extra money.
When you invest in dividend-paying stocks, mutual funds, or exchange-traded funds (ETS), you buy one share and get a dividend paid each quarter for an indefinite period.
Some stocks and funds pay more dividends than others, but you can find some options with higher annual yields.
These passive income sources are great for several reasons, including the following:
Strong historical growth
Low initial cash requirement
Like other classic paper assets, bonds pay interest payments until they mature. Also, investors get their initial money back.
If you invest in a bond, you give a loan to a borrower who can sell it in a secondary market. There are two options available: government bonds (which can come with tax benefits) and corporate bonds.
Although bonds haven’t paid as high returns as in the 20th century, they’re still a popular choice among those looking for lower-risk investment options.
Rental properties can also be a great form of passive income, as they can generate an ongoing cash flow without having to spend hours working or selling assets.
Most of the time, properties’ value appreciates. Therefore, rent payments usually pay down landlords’ mortgages.
In addition, rents are usually adjusted for inflation, so investors shouldn’t worry about economic downturns or negative events that could affect their returns.
Real estate investments are good options for those hoping to get retirement income, as they can drive your net worth higher over time.
Also, you can know if you will earn more money. Whether you invest in residential or commercial properties, you can accurately forecast long-term expenses and earnings.
Other Great Passive Income Sources
Besides the ones mentioned above, you can also consider these passive income courses to intelligently invest money and add digits to your bank account even if you aren’t working:
Public REITs: They’re liquid options to invest in real estate and are great if you’re looking for a fast and easy way to diversify your portfolio.
Private REITs: They’re privacy-owned funds investing in commercial real estate.
Crowdfunded Real Estate Loans: You can use them to invest directly in real estate without making a long-term commitment since these loans are usually short-term.
Private Notes: They function as a real estate crowdfunding but there’s no lender serving as a middleman.
Business Income: Many people also create a passive income source through an online business, especially if it’s related to a hobby or activity they love.
Residual Sales Income: Some companies continue to pay residual sales commissions to their employees even after they leave. Many people opt for this job to get ongoing, residual commissions if the client they bring is still with the company.
Royalties: They’re common in the art and entertainment world, but can be great passive income sources. Singers, musicians, book writers, and graphic artists often receive royalties if someone keeps buying their work.
If you pick a good alternative to invest $300,000, you’ll have a decent monthly income to enjoy financial independence during your golden years.
Actually, investing your retirement savings in an option that can give you passive income is a popular strategy!
However, before making a decision, you should get investment advice from a financial professional. With expert help, you’ll pick the right choice and have guaranteed income!