Working woman or a housewife, you want to make a contribution to your household income & for achieving this one needs to have a secondary source of income. Kotak Securities brings you ‘How one can get regular income through investing’. Kotak Securities is one of the largest share broking firm in india. Visit http://www.kotaksecurities.com for more details.
How to get regular income through investing
How to get regular
income through investing
We always want more…
• As a working woman or a housewife, you want to make a contribution to
your household income. You want to help fund your child’s education and
help your father after his retirement or get your home decorated.
• All this while, you have been relying on your primary source of income to
meet these goals. But it isn’t always enough.
• A secondary source of revenue is always welcome.
• This can be through different investments.
• Here are five ways:
2) Dog stocks
3) MF dividends
4) Systematic Withdrawal Plan
5) MF monthly income plans
• When you buy stocks, you are purchasing
a portion of the company.
• Any growth in a company, whose stock you
hold, will indirectly benefit you as an
investor. This is because, the value of the
stock will also increase. But that is not the
only source of returns from shares….
• Listed companies distribute a portion of their
profits to shareholders regularly as dividends.
This can be either on quarterly, half-yearly or
• Sometimes, after a company has extra cash
reserves, it could even announce a surprise
bonus dividend. As a result, it can be a source of
regular income to investors.
• Moreover, they are not taxed.
• Usually, there is an increase in buying of companies paying high dividends
around September, just before the distribution of the money. They are
identified using dividend-yield – calculated by dividing the dividend by the
• However, such stocks must be chosen wisely…
Consider Dog Stocks
• The dividend yield could be higher because of a fall in the stock price. This
could be an indicator of market’s lack of confidence in the company and
may be a red flag.
• As a result, it is better to opt for stocks with a consistently high dividend-
yield. They are called dog stocks.
• Many mutual funds also have an annual dividend-payout option. This
may come handy in bear market conditions.
• However, MF dividends are not assured. Moreover, when a mutual fund
announces a dividend of say Rs. 2, its NAV will fall by the same amount the
Systematic Withdrawal Plan
• Many mutual funds also allow a Systematic Withdrawal Plan (SWP)
option. Under this scheme, a fixed amount of MF units will be sold on a
particular day every month or quarter. This is just the opposite of the
Systematic Investment Plan (SIP).
• However, it is better to opt for this at least a year after purchasing the
funds to avoid any exit fees.
• Various mutual funds invest in both equity as well as fixed-income
instruments like bonds and corporate debentures.
• There are also schemes which invest only in debt instruments. These
funds are designed to provide regular source of income. These funds are
less risky than equity schemes. However, they also have a lower capacity
for capital appreciation.
MF Monthly Income Plans
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