"RULE NO.1: NEVER LOSE MONEY.RULE NO.2: NEVER FORGET RULE NO.1."         - WARREN BUFFETT
INTRODUCTION Assets are less ideal than income when you  need money to spend in the short-term. Investment strategies th...
3 TYPES OF INVESTMENT INCOME                  • Combines stocks as     Variable       well as fixed income                ...
VARIABLE INCOME INVESTMENT STRATEGIES Can outpace inflation and grow wealth over  time Allows for consistent and reliabl...
PREDICTABLE INCOME STRATEGIES Predictable income strategies are generally  safe and reliable investments, but all of thes...
EXAMPLES OF PREDICTABLE INCOMESTRATEGIES   Dividend income        Dividend income      from stocks               funds  • ...
EXAMPLES OF PREDICTABLE INCOMESTRATEGIES (CONT’D.)   Corporate Bonds               Bond Funds • Individual loans          ...
GUARANTEED INVESTMENT STRATEGIESThere are three (3) types of guaranteed investmentstrategies:         Treasury bills      ...
GUARANTEED INVESTMENT STRATEGIES:TREASURY BILLS                  Short term – less                    than a year         ...
GUARANTEED INVESTMENT STRATEGIES:FIXED ANNUITIES A fixed annuity is a contract issued by an  insurance company that makes...
GUARANTEED INVESTMENT STRATEGIES:CERTIFICATES OF DEPOSIT (CDS) Saving certificate issued by commercial bank Pays interes...
WHICH STRATEGY IS RIGHT FOR YOU? ASK:                    • How long are you                      looking into the         ...
WHICH STRATEGY IS RIGHT FOR YOU? ASK:                   • Higher worth                     allows riskier                 ...
WHICH STRATEGY IS RIGHT FOR YOU? ASK:                 • There are some                   investments that                 ...
INVESTING IN BONDS The basics of investing in bonds are really quite  simple. Remember that you are lending money to a  ...
THINGS TO CONSIDER WHEN INVESTING IN                     BONDS                           Bonds are rated for              ...
THINGS TO CONSIDER WHEN INVESTING INBONDS (CONT’D.)   3. Interest                 Typically paid every six months         ...
INVESTING IN BOND FUNDS These funds are similar to stock mutual funds.  The only significant difference is the type of  i...
THINGS TO LOOK AT WHEN ANALYZINGBOND FUNDS   1. Expenses                 Avoid funds with over-                 average ex...
THINGS TO LOOK AT WHEN ANALYZINGBOND FUNDS (CONT’D.) 2. Fund’s Credit Risk                         Mutual funds invest mon...
THINGS TO LOOK AT WHEN ANALYZINGBOND FUNDS (CONT’D.)  3. Interest rate risk                          People are willing to...
“Money isnt the most important thing in life,but its reasonably close   to oxygen on the „gotta have it‟ scale.”       -Zi...
GENERAL INVESTING TIPS           • Know where your money is             going so you can allocate more             money t...
GENERAL INVESTING TIPS (CONT’D.)               • The more your investment                 activities can be put on autopil...
GENERAL INVESTING TIPS (CONT’D.)               • People have a natural knack                 for moving their money at    ...
GENERAL INVESTING TIPS (CONT’D.)                 • Even if you have professionals                   investing your money f...
GENERAL INVESTING TIPS (CONT’D.)                • Even if youre not investing                  your money yourself, the mo...
POINTS TO NOTE There comes a time in most peoples lives  where income is more important than the value  of ones assets. ...
CONCLUSION – QUESTIONS TO ASKYOURSELF  How much investment income do you  need to have each month?  When do you need the i...
CONCLUSION If you lack the expertise to invest in fixed income  investments, dont hesitate to get professional assistance...
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Investment strategies-to-grow-your-income

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investment strategies to grow your income. How much risk can you subject your investments to? How much can
you afford to lose in the near future? Remember that most forms of
investment have risk associated with them. Simply pick investment
instruments that match your risk tolerance.

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Investment strategies-to-grow-your-income

  1. 1. "RULE NO.1: NEVER LOSE MONEY.RULE NO.2: NEVER FORGET RULE NO.1." - WARREN BUFFETT
  2. 2. INTRODUCTION Assets are less ideal than income when you need money to spend in the short-term. Investment strategies that focus on income make more sense as one nears retirement age. The main component for determining the amount of that income is risk. The greater risk one is willing to take on, the greater the potential for a high-income stream.
  3. 3. 3 TYPES OF INVESTMENT INCOME • Combines stocks as Variable well as fixed income instruments • Income that can be Predictable expected but is not guaranteed • Income guaranteed Guaranteed by a government or insurance company
  4. 4. VARIABLE INCOME INVESTMENT STRATEGIES Can outpace inflation and grow wealth over time Allows for consistent and reliable stream of income While the income will be less than that generated by a 100% income strategy, there will still be some income while providing asset growth as well.
  5. 5. PREDICTABLE INCOME STRATEGIES Predictable income strategies are generally safe and reliable investments, but all of these investments are on a sliding scale with regards to risk. For example, some bonds are very low-risk investments, but there are also very high-risk bonds.
  6. 6. EXAMPLES OF PREDICTABLE INCOMESTRATEGIES Dividend income Dividend income from stocks funds • Portion of profits • Focus on stocks that a company that consistently earns and pays pay dividends to back to investors investors • Look for stocks • Managed by that pay good investment dividends over professionals time.
  7. 7. EXAMPLES OF PREDICTABLE INCOMESTRATEGIES (CONT’D.) Corporate Bonds Bond Funds • Individual loans • Invests almost money to a exclusively in corporation bonds and other • Businesses in a riskier debt instruments financial situation • Different funds pay more for the have different privilege of rates of return borrowing your depending on money. the quality of the investments.
  8. 8. GUARANTEED INVESTMENT STRATEGIESThere are three (3) types of guaranteed investmentstrategies: Treasury bills Fixed annuities Certificates of deposit (CDs)
  9. 9. GUARANTEED INVESTMENT STRATEGIES:TREASURY BILLS Short term – less than a year Purchased in denominations of $1,000 and maximum is $5M Maturities are typically 4, 13 or 26 weeks Do not pay interest
  10. 10. GUARANTEED INVESTMENT STRATEGIES:FIXED ANNUITIES A fixed annuity is a contract issued by an insurance company that makes fixed payments over the term of the contract. The contract typically ends when the person receiving the payments dies.
  11. 11. GUARANTEED INVESTMENT STRATEGIES:CERTIFICATES OF DEPOSIT (CDS) Saving certificate issued by commercial bank Pays interest to the purchaser Maturity typically 1 month to 5 years Interest rate is fixed and compounded daily Guaranteed by the federal government
  12. 12. WHICH STRATEGY IS RIGHT FOR YOU? ASK: • How long are you looking into the future? • Longer time frame What is my time allows for greater horizon? risk. • Shorter investments: Be more conservative.
  13. 13. WHICH STRATEGY IS RIGHT FOR YOU? ASK: • Higher worth allows riskier investments. What is an acceptable risk? • If risk makes you uncomfortable, invest conservatively.
  14. 14. WHICH STRATEGY IS RIGHT FOR YOU? ASK: • There are some investments that are better left to What is my the experts, like expertise? junk bonds.
  15. 15. INVESTING IN BONDS The basics of investing in bonds are really quite simple. Remember that you are lending money to a company or government that issues the bond. The bond is simply an agreement to repay the face value on the bond plus a specified interest within a specific period of time.
  16. 16. THINGS TO CONSIDER WHEN INVESTING IN BONDS Bonds are rated for Sold over-the-1. Risk and bond ratings 2. Buying bonds risk. counter (OTC). AAA bonds are the Sold in $5,000 safest. increments. BB or below are Quoted as a risky‘. percentage of the face value. Risk is based on growth potential, financial stability and current debt.
  17. 17. THINGS TO CONSIDER WHEN INVESTING INBONDS (CONT’D.) 3. Interest Typically paid every six months Interest rate is based on the face value of the bond. Bonds with longer maturity dates tend to pay higher interest rates to take into account the unpredictability of the future.
  18. 18. INVESTING IN BOND FUNDS These funds are similar to stock mutual funds. The only significant difference is the type of investments the fund manager utilizes. Bond funds and dividend funds are frequently less volatile than stock funds and can also provide the investor with a steady stream of income. As with all mutual funds, there are different levels of risk and return. Ensure the fund you choose is a good match for your risk tolerance.
  19. 19. THINGS TO LOOK AT WHEN ANALYZINGBOND FUNDS 1. Expenses Avoid funds with over- average expenses. Expenses are more important with lower risk funds.
  20. 20. THINGS TO LOOK AT WHEN ANALYZINGBOND FUNDS (CONT’D.) 2. Fund’s Credit Risk Mutual funds invest money in companies with differing degrees of credit worthiness. Higher risk bonds and dividend- paying stocks can sometimes lose intrinsic value, which would lower the value of your investment and reduce your income stream.
  21. 21. THINGS TO LOOK AT WHEN ANALYZINGBOND FUNDS (CONT’D.) 3. Interest rate risk People are willing to pay more for a bond that pays more interest than one that pays less. Long-term bonds are more sensitive to the potential rise in interest rates. Interest rate risk is frequently higher when interest rates are low.
  22. 22. “Money isnt the most important thing in life,but its reasonably close to oxygen on the „gotta have it‟ scale.” -Zig Ziglar
  23. 23. GENERAL INVESTING TIPS • Know where your money is going so you can allocate more money to investments. Have a • The more money you can invest, Budget the more investment income you can generate.
  24. 24. GENERAL INVESTING TIPS (CONT’D.) • The more your investment activities can be put on autopilot, the more likely you are to invest money consistently. Invest • This includes 401(k)s, automaticautomatically withdrawals, and investing first before paying your bills.
  25. 25. GENERAL INVESTING TIPS (CONT’D.) • People have a natural knack for moving their money at exactly the wrong times.Avoid moving • Once you’ve found a good your money place for your money, try to around too leave it alone. much
  26. 26. GENERAL INVESTING TIPS (CONT’D.) • Even if you have professionals investing your money for you, its important to stay on top of things. Its your money.Stay on top of your • Dont be afraid to ask investments questions.
  27. 27. GENERAL INVESTING TIPS (CONT’D.) • Even if youre not investing your money yourself, the more you know, the better off youllKeep learning be.
  28. 28. POINTS TO NOTE There comes a time in most peoples lives where income is more important than the value of ones assets. As with any other type of investing, its important to be aware of your goals.
  29. 29. CONCLUSION – QUESTIONS TO ASKYOURSELF How much investment income do you need to have each month? When do you need the income? How much risk can you subject your investments to? How much can you afford to lose in the near future?
  30. 30. CONCLUSION If you lack the expertise to invest in fixed income investments, dont hesitate to get professional assistance. There are many experts out there waiting to help. Always continue to learn more about money and investing. The more you know, the better decisions youll make. Dont wait to get started. A strong, steady stream of income can be yours if you take the right actions and get busy!
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