Income Producing Investments

Image Source: Simon Cunningham

Image Source: Simon Cunningham

What are the best types of income producing investments available to Canadian investors?

Saving vs. Streaming

Those desiring to be financially independent need access to cash to support themselves without having to trade time for money. So regardless of age, income producing investment can prove invaluable.

If we look at the wealthiest individuals around the world today, the vast majority of them on the 2015 Forbes list of richest billionaires turned income streams into piles of money. Not the other way around.

It is very hard to create a sufficient nest egg to retire or become truly wealthy by saving alone. Even those earning six figures per year can find it very challenging to stash enough of their pay to provide for an on-time retirement, let alone an early one.

Income investments change the dynamics. They allow for early retirement while helping to increase net worth at the same time.

Maintaining a Nest Egg

While having billions in the bank might be great, everyone still needs an income. Millions and billions can be spent very rapidly. Investing in income-producing assets can preserve wealth, while providing plenty of income for living expenses.

Income Investing

Buying a business, stocks and publicly traded REITs are all forms of investments with income potential. However, given current conditions and future forecasts, direct investments in income producing real estate might stand out head and shoulders above the other prospects.

How many billionaires and even millionaires can you name that own no real estate?

There’s a reason for that. Even those that didn’t make the bulk of their wealth from real estate investments hold a lot of their wealth in real estate today. Real estate helps provide a shelter for capital and throws off regular cash flow from rents. Properties can even build wealth simultaneously as values rise and by making valuable improvements.

Conclusion

No amount of tight budgeting, coupon cutting and Groupon deals are going to help most get to be where they want financially. Even those that have accumulated large sums of wealth need to preserve it and derive income from it without depleting it.