While it’s wise to have a concern for increasing your assets, you may also wish to focus on using your investments to augment your income. For example, if you inherited a valuable piece of artwork worth $1 million, you could hang it on your wall and increase your assets by $1 million. However, that picture on your wall does little to help you pay your expenses. Investment strategies that focus on growing assets will generally result in greater wealth over the long-term, but it’s also possible to generate a significant income via the proper investment channels. Investment strategies that focus on income make more sense as you near retirement age. With income-producing investments, you can lower your risk. This might be especially important to you if you’re too close to retirement to have the time to recover from significant asset loss. Also, once you’re retired, you’ll want a reliable and consistent source of income.

1. " R U L E N O . 1 : N E V E R L O S E M O N E Y .
R U L E N O . 2 : N E V E R F O R G E T R U L E N O . 1 . "
- W A R R E N B U F F E T T

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 TYPES OF INVESTMENT INCOME
•Combines stocks as
well as fixed income
instruments
Variable
•Income that can be
expected but is not
guaranteed
Predictable
•Income guaranteed
by a government or
insurance company
Guaranteed

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. 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. EXAMPLES OF PREDICTABLE INCOME
STRATEGIES
Dividend income
from stocks
•Portion of profits
that a company
earns and pays
back to investors
•Look for stocks
that pay good
dividends over
time.
Dividend income
funds
•Focus on stocks
that consistently
pay dividends to
investors
•Managed by
investment
professionals

7. EXAMPLES OF PREDICTABLE INCOME
STRATEGIES (CONT’D.)
Corporate Bonds
•Individual loans
money to a
corporation
•Businesses in a riskier
financial situation
pay more for the
privilege of
borrowing your
money.
Bond Funds
•Invests almost
exclusively in
bonds and other
debt instruments
•Different funds
have different
rates of return
depending on
the quality of the
investments.

8. GUARANTEED INVESTMENT STRATEGIES
There are three (3) types of guaranteed investment
strategies:
Treasury bills
Fixed annuities
Certificates of deposit
(CDs)

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. 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. 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. WHICH STRATEGY IS RIGHT FOR YOU? ASK:
• How long are you
looking into the
future?
• Longer time frame
allows for greater
risk.
• Shorter
investments: Be
more
conservative.
What is my time
horizon?

13. WHICH STRATEGY IS RIGHT FOR YOU? ASK:
•Higher worth
allows riskier
investments.
•If risk makes you
uncomfortable, i
nvest
conservatively.
What is an
acceptable risk?

14. WHICH STRATEGY IS RIGHT FOR YOU? ASK:
•There are some
investments that
are better left to
the experts, like
junk bonds.
What is my
expertise?

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. THINGS TO CONSIDER WHEN INVESTING IN
BONDS1.Riskandbondratings
Bonds are rated for
risk.
AAA bonds are the
safest.
BB or below are
'risky‘.
Risk is based on
growth
potential, financial
stability and current
debt.
2.Buyingbonds
Sold over-the-
counter (OTC).
Sold in $5,000
increments.
Quoted as a
percentage of the
face value.

17. THINGS TO CONSIDER WHEN INVESTING IN
BONDS (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. 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. THINGS TO LOOK AT WHEN ANALYZING
BOND FUNDS
1.Expenses
Avoid funds with over-
average expenses.
Expenses are more important
with lower risk funds.

20. THINGS TO LOOK AT WHEN ANALYZING
BOND FUNDS (CONT’D.)
2.Fund’sCreditRisk
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. THINGS TO LOOK AT WHEN ANALYZING
BOND FUNDS (CONT’D.)
3.Interestraterisk
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. “Money isn't the most
important thing in life,
but it's reasonably close
to oxygen on the
„gotta have it‟ scale.”
-Zig Ziglar

23. GENERAL INVESTING TIPS
Have a
Budget
•Know where your money is
going so you can allocate more
money to investments.
•The more money you can
invest, the more investment
income you can generate.

24. GENERAL INVESTING TIPS (CONT’D.)
Invest
automatically
• The more your investment
activities can be put on
autopilot, the more likely you are
to invest money consistently.
• This includes 401(k)s, automatic
withdrawals, and investing first
before paying your bills.

25. GENERAL INVESTING TIPS (CONT’D.)
Avoid moving
your money
around too
much
•People have a natural knack
for moving their money at
exactly the wrong times.
•Once you’ve found a good
place for your money, try to
leave it alone.

26. GENERAL INVESTING TIPS (CONT’D.)
Stay on top of
your
investments
•Even if you have professionals
investing your money for
you, it's important to stay on
top of things. It's your money.
•Don't be afraid to ask
questions.

27. GENERAL INVESTING TIPS (CONT’D.)
Keep learning
•Even if you're not investing
your money yourself, the more
you know, the better off you'll
be.

28. POINTS TO NOTE
 There comes a time in most people's lives
where income is more important than the value
of one's assets.
 As with any other type of investing, it's
important to be aware of your goals.

29. CONCLUSION – QUESTIONS TO ASK
YOURSELF
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. CONCLUSION
 If you lack the expertise to invest in fixed income
investments, don't 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 you'll
make.
 Don't wait to get started. A strong, steady stream of
income can be yours if you take the right actions and
get busy!

31. We hope you enjoyed your Special Report!
Curtis Roese is an experienced professional with extensive experience in
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