Creating an income of $100 a month challenge

[Nika]

Investment income, I mean.
How much would you need and how would you do it?

Would your strategy be different if it was $200 a month? Of course, you would need more capital, but would your allocation be different?

[bjl584]

I guess it depends how risky you want to be.

If I went all in on your AGNC then I would need about $8000. It pays around a 15% yield, so that would be about $1200 annually, or $100 a month.

Less risky, you would obviously need more cash.

My accounts pay out several hundred a month, but it is spread out over a wide range of investments. And, all of my dividends are reinvested.

[Nika]

Bjl, what are your faves besides REITs? I'm kind of weary of the "all eggs one basket" approach.

[bjl584]

I have positions in CHI (9% yield monthly), ECT (13% yield quarterly), BP (5% yield quarterly), VZ (4.5% yield quarterly), FE (6% yield quarterly), CAT (2% yield quarterly) Plus some others.

[Goldy]

I'm currently getting a return of 16.7% on my lending club account so I would need just a bit over 7k to generate 100 bucks a month. Given that its a loan payment investment the interest decreases each month as they pay off the loans so if you wanted to average 100/mo then you would need to start with more principle.

[kv968]

You could also, for diversification, look into Master Limited Partnerships (MLP's). There are some ETF's and ETN's that currently offer a ~5% yield...

MLP List

The thing with MLP's is that the the tax treatment can be kind of tricky and cumbersome (K-1 filings). However if you were use an ETN rather than an ETF in this instance you wouldn't have to deal with all of that due to the way they're constructed.

You could also go with an individual MLP such as Kinder Morgan (KMP-5.6% yield), Energy Transfer Partners (ETP-7.75% yield), etc...but then you'd be back with the tax hassle.

[amarowsky]

I have positions in CHI (9% yield monthly.

I was thinking you did a spelling mistake when you said 9% monthly, so i went and researched everywhere. But you were implying 9% annual distributed monthly (stupid of me). But that is a solid return. How long have you held calamos? And do you hold it actually for a fixed income or as investment build capital?