Hi here. My name is Christi Bradford, and I’m here to teach you about income investing – even if you’ve never heard the term before.
I’m learning from the founder of this website – Susan Lassiter-Lyons. As she’s showing me, there are many ways to make money by investing.
It’s likely that Susan has tried them all at this point.
If you’re anything like me and you’re still new to all of this, let me help you.
There are three main styles of investing that you’ll hear about. They are…
Value investing, Growth investing, and Income investing.
I have learned that value investing focuses on buying a stock that is undervalued according to a fundamental analysis, and holding that stock until it has reached its true value. Many of us have heard of this.
Value investors care a lot about profits and where the profits are trending. They care a bit about gross margins. They don’t care as much about revenue.
So, value stocks are presumed to be traded at a discount to their true or fair value. WalMart, Google, and Disney would be examples. They don’t always particularly have fast growth (Google is pretty fast), but they are value related and have room to grow.
They also might provide dividends to investors. That’s not promised, but it’s possible.
Growth investing is identifying stocks that have exhibited faster-than-average growth (earnings, revenue, etc) compared to the market, and are expected to continue this growth in the future.
People who love this kind of investing are mostly concerned with revenue, and gross margins that are expanding matter a lot to them, too. This is especially true where tech companies are concerned.
Netflix and Amazon would be example of “growth” companies. So would Dropbox.
The vast majority of us have heard of this kind of investing, and it can be a frightening thing to invest in stocks if you don’t know what you’re doing. The market goes up and down – a lot.
The goal with growth investing is to generate capital gains by way of a higher share price. Last of all…
Income investing is in many ways similar to value investing. The goal here is to generate cash while leaving your original investment alone. That way, your cash makes cash. Sometimes, even your cash’s cash can make cash. It all depends on how you reinvest your earnings.
I mentioned it earlier in value investing, but many value companies also provide an income or dividend.
What Model Am I Following Nowadays?
It’s May of 2021, and I used to want to be a baby Warren Buffet. I just could never understand investing. It felt too overwhelming to me. Now, I only want to pay my bills each month and live life with less financial stress.
While I spent years floundering financially, Susan Lassiter Lyons was looking for undervalued stocks to invest in.
I just picked my first investment. I’m about a week in, so not much to share yet.
But here’s the problem with both value and growth investing…
If you don’t sell the stock, you don’t get the income.
To all of us, that’ should be a big problem.
After all, I want income. Lots of income. Multiple streams of income. Passive income.
Income Pays the Bills, Not Equity Growth or Value.
My ultimate financial goal is to grow a portfolio of passive income investments that pays me more every year than I spend. That’s the same thing Susan wanted once she got 100% clear on her investing.
So I’m following her wise model.
When your passive income exceeds your expenses you, my friend, have reached financial nirvana.
It’s the definition of freedom that most of us spend years seeking – without finding.
And when I look at Susan, I am just so excited about where my own life is headed. I can tell she is in a state of financial nirvana. She looks relaxed and fulfilled.
And while I enjoy my own work and am grateful for it, I also know there’s another level to attain.
I’ve learned that, as daunting a task as it may seem to get control of my finances, it’s not that difficult to achieve. It just requires two things: time and a plan.
I have already chosen to use my time to create a plan and do the work. The most important work is done. Now, let’s break is down to see how to create the income I want.
Let’s Break It Down.
My total monthly expenses – including my business – are $11,600.
That’s everything – housing, doctor’s visits (still working on health insurance) 🙁 , car maintenance, food, utilities, and business tools.
That adds up to $139,200 a year. I know I can bring that number down a little, but I’m also factoring in aging parents and taking care of their retirement home, which I help with, already.
I could cover that with a salary – going to work every day for some company trading my time for dollars.
But I don’t want that, even though I know jobs are a blessing for many.
For me, I would rather have a location independent business that generates income for me to invest.
I want the best the best of all worlds. Like Susan…and please understand that I am not comparing myself to her. No way! I’m just saying that she’s farther along the road I’m now on.
And I look forward to easing on down this income investing road…having a business doing something I love (teaching and writing) that generates dollars that I put to work in the world.
Ultimately, it won’t just be ME working for the income – it will be my dollars.
I’m starting to look at each one of my investment dollars as a little soldier.
And I send each dollar soldier into battle with strict orders to capture more dollars and bring them back to me every month, every quarter, every year.
That’s Income Investing
Look, assuming a 10% return, making $11,600 in income only takes a total of $116,000.
And a 10% return for us is average.
Susan’s portfolio averaged about 28% the last time I checked.
As a result, with that return all I need to have invested is $497,143 in total to generate my $139,200 a year.
I never thought like this before. I always assumed I’d have to take my money out of a stock in order to see any income. Thank God I met Susan, who has helped me to shift my thinking.
Now I am learning to leverage my money for income. My entire world is changing.
And contrary to what most “old school” investors would have you believe, income investing is FUN!
Look…you are probably at least a little like me. I thought as most people do, that income investing was only about investing in bonds and stocks that pay dividends.
And both of those topics instantly put me to sleep.
Honestly, if I had to only invest in bonds and dividend stocks for the rest of my life I would probably suffer from investment-induced narcolepsy.
But now that I’ve met someone and am learning from someone who is living the dream, income investing has become my mission. I see opportunities everywhere.
I’ve discovered 12 different types of income investments to share with my readers.
That’s a lot of opportunity, fun, and income!
As you now know, I’m a big believer in income investing. How are YOU investing?
For value, growth, or income?
Ready to start? If so, put your email in the box that should have popped up for you. All the info on how to get started are right there and I’ll get them to you right away.
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[…] As income investors, we invest for income… duh. […]
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