Extra monthly income from investments
Wed, 2009-09-02 16:29
How can I receive an extra monthly income (to actually use) from investing? Is it even a wise idea to do something like that or possible?
How can I receive an extra monthly income (to actually use) from investing? Is it even a wise idea to do something like that or possible?
Investment generate two main forms of income: dividends from stocks and interest from bonds. The amount of income they produce is called "yield" and it is measure as a percentage (%). For example, the current yield on the S&P 500 market is about 2.4% which means that you earn $2.40 for every $100 you have invested in it. Bonds usually yield higher than stocks.
So the answer is yes, you can earn income from your investing. But how much you earn depends on a particular investments yield and how much you have in it.
If you don't particularly need the income, I would just keep reinvesting it. Reinvesting will increase the growth of your portfolio over time.