Living Off Investments

Posts on living off investments, investment income, alternative income investments, dividend investing, covered call writing, strategies for living off investments, REITs, MLPs.

Reducing Risk in Stocks | 13 Lessons from Past Bear Markets

After surviving a few bear markets over the past 40 years as an investor, I’ve learned many lessons from them.   Reducing risk in stocks before bear markets take full hold helps investors protect their net worth as well as have capital to invest in stocks again once unusually low valuations are reached.  This sounds almost too obvious to write, but most investors don’t take …

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Are Dividends or Capital Gains Better?

You may have noticed that you’ve gotten both capital gains and dividends from investing. Are dividends or capital gains better? While I wouldn’t turn down either, dividends are better when you have decided to live off investments, and capital gains are better for building wealth. The Difference Between Capital Gains and Dividends While making money …

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How Do Covered Calls Work?

  You may have heard that selling covered calls can increase earnings from stocks.   How do covered calls work exactly? Covered call writing is a strategy where a stock investor sells call options that give the call option buyer the right to buy the stock from the stock investor at a set price and within a certain …

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In the Money Covered Call Strategy

  Selling in the money covered calls can be an excellent income generating strategy for those living off investments.  An in the money covered call strategy involves selling a call option with a strike price higher than the cost of the underlying stock to increase income from stocks.   After writing covered calls over the past 13 years, I have found that there …

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Does the 4% Rule Include Dividends?

If you’re exploring early retirement like we were well over a decade ago, you may be wondering about the income provided from the standard 4% retirement withdrawal rule. Does the 4% rule include dividends, specifically? Or do investors using this popular plan get to withdraw 4% annually in addition to dividend income? The 4% rule …

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When to Switch from Growth to Income [With Videos]

Growth investing is usually done during an investor’s high income years while income investing is usually done during retirement, but the best time to transition from growth to income can be unclear. If you’re wondering when to switch from growth to income investments, the answer depends on several factors including net worth, income sources, wealth …

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How to Buy Assets That Generate Income

If you’re approaching retirement, that anticipated time when you can live off investments or at least work fewer hours own your schedule, you’re probably transitioning to income investing. You may be wondering how to buy assets that generate income. The way you buy income generating assets depends on the type of asset you’re buying. For example, …

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man planning retirement

The Best Income Stream to Start Before Retirement

If you’re concerned about having enough income to live comfortably in retirement, you may want to start one or more income streams beforehand but you’re not sure where to start. To choose the best income stream to start before retirement, consider your desired income, eventual capital gain, acceptable risk and lifestyle. It’s easy to get …

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Problem - Solution

Problems with Covered Calls

Covered calls can be an excellent way to increase income from stocks but like all investments, covered calls aren’t perfect. The problems with covered calls include stock market risk, company risk, high capital, missing capital gains, taxes, and management. It is my belief that the benefits far outweigh the problems with covered calls for income …

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retirement nestegg | Are covered calls a good strategy

Are Covered Calls a Good Strategy?

In this time of low dividend yields, increasing stock income by selling call options on stocks you already own sounds pretty appealing to yield hungry investors. Are covered calls a good strategy? Selling covered calls increases income significantly while decreasing risk making them an excellent income strategy for stock investors.  In fact, you can add …

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weighing pros and cons | owning a business vs real estate

Owning a Business Vs Real Estate | What I Learned from Each

Every day more investors are getting into entrepreneurship or real estate and you may be wondering if either makes sense for you. The opportunities from owning a business vs. real estate vary based on 9 factors including time, capital, risk, income potential, wealth building potential, leverage and ease of implementation.  In this post, I’ll share …

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What Are the Risks of Bonds? Chart Stocks Vs Bonds

  Updated August 8, 2019 Investing in bonds definitely has risks, contrary to what many investors think. Just what are the risk of bond investments? They include interest rate risk, default risk, inflation risk, call risk and economic risk. The fact that bonds are used to offset risk from stocks, and the very long bull …

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Covered Calls for Income – Example of a Recent Strategy I Did with ROI [Charts]

Most investors own stocks in their portfolio with the expectation to build wealth while also getting dividend income. But many investors don’t realize they can sell covered calls for income on their stock holdings, without increasing risk, and get 6 to 9 times the income that’s derived from dividends alone. Why isn’t everyone selling covered …

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How Much Money Do You Need to Live Off Investments? Choose From These 3 Layers

  Living off investments defines financial independence. Just how much money do you need to live off investments completely? Get a good estimate by dividing your annual desired income by the expected yield. For example, if you want $10,000 a month in investment income, divide $120,000 ($10,000 x 12 months) by the  yield (5% in …

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How to Get More Income from Investments – 44 Strategies

  Investors spend most of their lives concentrating on investing for growth vs investing for income. The way to generate more income from investments, then, is to simply shift your overall objective from growth to income.  Here are  44 ways to get more income from your investments ranging from stock dividends to alternative income investments, such …

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Is Your Retirement Income Goal Impossible?

Are you concerned about having enough money to retire? Does it seem impossible to reach your retirement income goal? I get it! About a decade ago, after facing the realization that income from stocks and bonds alone may not sustain our standard of living for life, we set a retirement income goal to replace our …

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Does Living Off Covered Calls Really Work?

Are you wondering if living off covered calls is feasible? Over ten years ago, I wrote my first covered call, and I’ve written hundreds of covered calls since then. Here I’ll share why living off covered calls alone can be challenging, and some solutions if you’re considering this little known but sensible income stream. Is …

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Retirement Withdrawal Strategies – Do They Still Work?

Have you heard that the past reliable retirement withdrawal strategies don’t work anymore? Well, there is good news, and bad news around that rumor. The good news is that retirement withdrawal strategies can work for those seeking to withdraw 1 to 4% a year from their investment accounts as a passive source of funds. The bad …

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How To Live Off Investments During Low Interest Rates [Videos]

You may be wondering how to live off investments, especially in this day and age of extremely low interest rates when your investments don’t earn much income. Simply put, you can live off investments in one of three ways:  Spend your savings and the growth from that money Spend the income your savings generates for …

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