When it comes to investments, there is really a limited amount of choices that provide cash flow. Most investments are designed to mature and yield growth over a longer period of time. However, investments with cash flow have the added advantage of growing and giving you payouts as you go. This can not only keep your motivation going strong, but it can inspire you to hold the investment for the length of time needed to properly see strong returns. These five investments are among the best for cash flow. By learning more about them and their different advantages, you'll be able to know which ones fit your personal interests, needs, and lifestyle.
Businesses have long been the traditional cash-flow producing investments that gave their owners money as the business continued to grow. The advantage to owning a business is that you control many aspects of your investment that would otherwise be handled by someone else. However, the downside is that it puts a lot of responsibility on you to make it happen. There's no one else to blame when your investment doesn't perform the way you wanted. Of course, not all factors are within your control, and 50% of businesses fail within the first five years. So, the risk may be higher than you're comfortable with.
2. Dividend Paying Stocks
It used to be that most stocks paid dividends in the early days of investment. Today, dividends have taken somewhat of a back seat to other performance indicators that interest managers of large investment groups and securities. However, there are still plenty of companies out there who issue stock and pay dividends. The strength of the stock depends on the strength of the company. Most stocks pay a low yield of 2% or less. Those aren't worth examining if cash flow is your interest. However, you can stumble across quite a few canadian dividend stocks that have a history of paying out higher dividends. You'll have to exercise some caution, though. Normally, stocks that pay dividends greater than 25% become very risky. So, don't think of dividend paying stocks as a magic bullet. If you've got any knowledge or interest in the stock market, though, then dividend paying stocks can provide you with a source of income and an investment that grows over time. Be sure to do your research and become familiar with any company before you decide to invest your money with them.
3. Real Estate
Real estate is another area of income-producing investments that has been around for a long time. Income can be produced from rental property where you enjoy a healthy cash flow while your investment increases in value. As with businesses, real estate gives you much more personal influence over your investment. Unlike businesses, though, real estate has traditionally appreciated in value over the long term. So, it tends to be a safer investment. That being said, many people have suffered due to foreclosures. The lesson is that you've got to know what you're doing on the financial side. Investment property tends to be an expensive proposition, and it's easy to get in over your head quicker than you realized. Another disadvantage to real estate is the hassle and time it takes to deal with tenants, maintenance, and government regulations. It's not an easy investment, but it can produce a very substantial cash flow.
4. Internet Sites
If you've got a feel for the web or a technical side, then the internet may provide you with a source of investments that return a positive cash flow. Indeed, it's not necessary that you understand every little technical detail out there. That's impossible for even the most high-tech internet geek. Instead, you'll need to have a keen sense of who to hire to outsource the technical work you need done. You may even need to farm out writing, internet video, and maintenance to others. However, the internet was built by many people who started with a dream and asked for help as they went along. To correctly get your internet sites to produce cash flow as you grow, you'll need to add one word to your vocabulary: monetization. That's general internet lingo for getting a site to produce some form of cash. Some of the more common ways to monetize a site are to place advertising, market to a customer list, or recommend affiliate products that pay a commission of sales you send them.
5. High Yield Savings or Money Market Accounts
High yield savings and money market accounts can also provide you with cash flow. The advantage to using these type of accounts is the almost guaranteed income you'll get. Most accounts are protected by some form of insurance, government or otherwise. The downside to high yield accounts is that it usually takes a substantial amount of capital to qualify for the rates that will yield any sort of significant cash flow. If you've already got that much capital to play with, then maybe some of the other choices might be better suited for you. Still, these accounts are a safe bet for slow growth if you only take a portion of the interest paid to you.