Most people when asked today are either floundering in debt or asset rich and cash poor. This is because most of the funds and plans that people invest in are usually capital appreciation instruments. This means that you can make money due to the difference in the buying and selling price of the instrument. So while you are invested in the instruments, you do not make much with the exception of dividends issued either once or twice a year. This article will therefore introduce you to three common cash flow generating instruments which can help you generate such cash for your investment portfolio. REITS also known as Real Estate Investment Trusts are basically instruments which allow individuals to get a stream of income from the rental income of the properties after the management companies deduct their operating expenses to manage the properties. Yields may vary between classes of properties and you buy the shares in the REITs and have a share of the rental income. Spend time looking at the return of the REIT and the properties portfolio to decide if that REIT is for you to invest in. Avoid REITs with overly high management fees since its not in your best interest. Forex Managed Accounts represent another income stream if you are not into Forex Trading yourself. Some banks and large financial institutions have Forex Traders trading on your behalf and they can give you certain fixed monthly returns each month. Look for companies that have good money management strategies and look at some of their returns before investing in these companies. But that said in Forex the risk comes with great reward so do consider Forex Managed Accounts a possible investment alternative. Oil Trusts work like real estate investment trusts, except that the amount that you get is dependent on the price of oil. You are basically sharing the oil proceeds with the oil field and each month they calculate the price of oil sold and you get a share of that. This means that you will earn more in a month where the price of oil is high. Thus the best time to invest in these more exotic investments is when the price of oil is low and you can purchase more shares of the oil field at a lower price. In conclusion, its not all and gloom in investment land. Spend some time looking and shopping around for cash flow generating money making investments to balance your investment portfolio so that you will not end up asset rich and income poor. Even better, take your capital gained from your other instruments and then slowly place them into real estate of you own and generate even more cash each month to spend. Take massive action today and reach your financial destiny earlier rather than later! Copyright 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.) |
