What is Income Investing? * Investor Insights

What is Income Investing?

By Susan Lassiter-Lyons | Bonds

Jun 19

There are many ways to make money investing.

And I’ve likely tried them all.

There are three main styles of investing that we all hear about…

Value investing, Growth investing, and Income investing.

Value investing focuses on buying a stock that is undervalued according to a fundamental analysis, and holding that stock until it has reached its true value.

So, value stocks are presumed to be traded at a discount to their true or fair value.

Growth investing is identifying stocks that have exhibited faster-than-average growth (earnings, revenue, etc) compared to the market, and are expected to continue this growth in the future.

Income investing is in many ways similar to value investing, where unlike growth stocks, the goal is to generate cash instead of focusing on generating capital gains via higher share price.

I Know You Are, But What Am I?

For many years I was a value investor – a Baby-Buffett – looking for undervalued stocks to invest in.

I’ve never really focused on growth investing until I began investing in cannabis stocks.

In my CannaVestor Lab newsletter, I scour the marijuana stock universe analyzing penny pot stocks for growth.

And we’ve found many – currently 12 of my 33 picks have delivered growth of 100% or more in just a year.

That’s some growth!

But here’s the problem I ran into with both value and growth investing…

If I don’t sell the stock, I don’t get the income.

To me, that’s a big problem.

I want income.
Lots of income.
Multiple streams of income.
Passive income.

Income Pays the Bills, Not Equity Growth or Value.

My ultimate financial goal is to grow a portfolio of passive income investments that pays me more every year than I spend.

When your passive income exceeds your expenses you, my friend, have reached financial nirvana.

It’s the definition of freedom that most of us spends years seeking.

And I can’t state strongly enough how my life changed once I hit that financial nirvana.

How much more fun, fulfilling, and relaxing it is!

And it’s not that difficult to achieve – it just requires two things: time and a plan.

Let's Break It Down.

My total monthly expenses – including my business – are $7,600.

That’s everything… mortgage, health insurance, gardener, pool guy, utilities, even the hosting on this website.

That adds up to $91,200 a year.

I could cover that with a salary – going to work every day for some company trading my time for dollars.

But I don’t want that hassle.

I would rather have a location independent business that generates profits for me to invest.

It’s the best of all worlds.

I have a business doing something I love (teaching) that generates dollars that I put to work in the world.

It’s not ME working for the income – it’s my dollars.

I look at each one of my investment dollars as a little soldier.

And I send each dollar soldier into battle with strict orders to capture dollar POW’s and bring them back to me every month, every quarter, every year.

That’s income investing.

 

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Look, assuming a 10% return, making $7,600 in income only takes a total of $76,000.

And a 10% return for us is average.

My Real Passive Profits newsletter is focused on passive real estate investments and we’re averaging about 28%.

With that return, all I need to have invested is $325,000 in total to generate my $91,200 a year.

So, my investment thesis over the years has shifted.

And I’m glad it did because once I learned to leverage my money for income, my world changed.

And contrary to what most “old school” investors would have you believe, income investing is FUN!

Thank goodness.

At first, I thought as most people do, that income investing was only about investing in bonds and stocks that pay dividends.

And both of those topics instantly put me to sleep.

Honestly, if I had to only invest in bonds and dividend stocks for the rest of my life I would probably suffer from investment-induced narcolepsy.

But now that I’ve made income investing my mission, I see opportunities everywhere.

I’ve discovered 16 different types of income investments to share with my readers.

16!

That’s a lot of opportunity, fun, and income!

What About You?

How are YOU investing?

For value, growth, or income?

And how can you start making your money work just as hard as you do?

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About the Author

Susan Lassiter-Lyons is an investor, entrepreneur, author, and coach. She helps people create and grow a perfect portfolio of income investments that yield big returns without big risk.

  • Sharon says:

    Thanks Susan for that great advice. Can you share the best strategy for locating those opportunities?

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