Invest in income producing assets to have secured and beautiful life

Invest in income product assets to have secured and beautiful lifeInvest in income producing assets to have secured and beautiful life

This post topic is based on request made by Pankaj on “Suggest-a-topic” for income producing assets.

In this ever changing and highly competitive economy, a common man always wants to secure his two meals a day. The first question that comes to his mind is-“How can I secure my family in future so that they don’t have to strive for their daily needs”? Can I do something now; invest somewhere which will give me an assured income? What all assets can I buy for this “assured” income?  One of the best ways for a common man to invest for a reasonable income in my opinion is to invest in “Income producing assets”. In this article, I would detail about what are income producing assets and how you should invest in them to secure your family future.

Also Read: Smart Investment Plans – Follow these simple rules for better returns

What are income producing assets?

These assets are nothing but economic properties that give cash flows as long as we hold on to them. For example: Investment in a property that can give a fixed rental income or buying debentures that can give a fixed interest, etc.

Types of Income producing assets and its sustainability to individuals

I have tried to enlist some of the income bearing assets hereunder. This is an inclusive list and not exhaustive.

1) Stocks for dividend income

Investments in stocks and securities of good and prosperous companies give us dividend income. These dividend cash flows can be a decent income from income generating assets. But it is generally preferable for medium and high risk investors as the distribution of dividend is totally dependent on the discretion of the board of directors and the available profits of the company.

2) Interest bearing debentures/bonds

Purchase of fixed interest bearing securities such as debentures and bonds can be a good income producing asset for low risk investors. These are not like dividend income from stocks where it would be available only upon profits from the company. Debentures are fixed liabilities for companies and hence they are bound to pay this interest even if there are no profits from its operations.

3) Interest from Bank FD

This is my favorite income producing assets. Since banks are monitored by RBI, I felt investment of your bank FD would be safe and is the best income producing asset. This is favorite for all class of investors like high risk or low risk investors as every one want some money to be invested in such safe investments.

4) Rental income from real estate:

his is one of the best options for the low and medium risk investors, provided the pocket allows, a purchase of a real estate helps us in two ways:

•      Fixed rental income 

•      Value/capital appreciation

So, even when a man has no business, no money in his pocket but a real estate property purchased in the yesteryears, he can live peacefully only with the rental money.

5) Mutual funds dividend

Dividend or monthly income funds give us regular income with medium risks. The chance of capital erosion is comparatively less in these kinds of funds.

6) Internet assets

Certain assets like blogs, domains, websites, etc. can also be a good income generating asset. Myinvestmentideas.com is a classic example. I have started this blog more than a year back. While it is helping me in fulfilling my passion towards analysing financial products, it also gives me passive income. The income may be small, but it adds to your total income. Various cash flows in the form of advertisements, commissions and registration fees come in easily. This source of income is again good for medium of high risk investors as the popularity and success of the site is not in ones hand.

7) Royalty income from intellectual assets

Books, movies and music can also become ones intellectual asset and earn handsome royalty income. These assets once created can actually make one’s life for generations to come.  A royalty is made to the legal owner of a property, patent, copyrighted work or franchise by people who wish to use it for the purposes of generating revenues or any such desirable activities. 

Also read: 10 Wealth building strategies in fast changing world

This list as I said is not an exhaustive list. Anything for example an email account can also be an asset in network marketing. Many websites use this email list as an important tool to fetch vivid orders for their products.  One of my friends got a 100 yr old sword as legacy from his great grandfather. Apparently this sword cannot be termed as an income generating asset, right? But, one day some Rajasthani man approached him for the sword to wear it in his wedding (A custom for Marwari weddings) and paid 50$ as rent. Since then my friend started giving it for rent and this sword is now booked for 20 days in a month. Hence, a simple thing like a sword turns into a cash flow asset J

This world is a very complicated place to live in. Nothing here lasts forever. A man dies, but his memories remain. Now it is on us how to live our lives peacefully. A penny invested tactfully now, can give us fixed income in years to come. At an older age, the capacity to earn diminishes, but the hunger doesn’t. Money is power in this world! If you have money, you can conquer the world. Everyone around will help you, care for you when needed. Therefore to be on a safer side, one should invest in some income generating assets as and when he has funds to invest. These cash flow assets are the best friends in bad times. One doesn’t have to worry for petty expenses. Everyone has ups and downs in lives. Be it a business or service, anyone can face a setback. The income from these assets can serve the basic needs of a family in bad times also.

Conclusion: One must take risks in life to flourish. But there should always be a balance between the profits and income. There may or may not be profits, but income will always walk side by side with us.

Finally, thanks to Pankaj who has requested this topic which I feel would be useful for many readers.

If you enjoyed this article, share it with your friends and colleagues through Facebook and twitter.

Team – Myinvestmentideas.com

17 comments

  • Raj kumar

    Sir
    your site giving more financial advices to all. In this site I am requesting you to give me the following topic if possible
    HOW TO BUILD LONG TERM PORTFOLIO IN STOCK MARKET AND HOW TO ENTRY AND EXIT THE STOCKS AT CORRECT VALUATION PRICE

    • Sure Raj. However you need to do me favor by putting this topic on “Suggest a topic” option on our blog so that it would be in our radar and I can inform as soon as it is reviewed and posted.

  • Krishna

    Excellent article suresh. You set yourself a high standard in my mind(probably in every reader's mind). Your way of describing evrything looks great, even for layman like me.

    I need your suggestion on my investment strategy (actually there is none in deployment). I'm 24 and having monthly earning of 45k. I request you to give me a investment strategy i.e.,how much I can invest & in what?

    Also, request you, if possible to provide an article on investment banking Jargons (being new to this industry, I'm struggling with the keywords). Thanks again for the wonderful blog.

    • Thanks Krishna. Happy to note that our blog is useful for new investors like you. Good to note that you are showing interest at young age to do savings. To start savings, my suggestion is to start a recurring deposit in any bank where you are holding account or where you can get good RD interest rate 2) Start picking up a few mutual fund and invest thru SIP (monthly recurring investment). You can choose like ICICI Pru focussed blue chip fund or HDFC Top-200 etc. Invest smaller amounts till the time you get clarity about how mutual fund runs. Once you get familair, you can invest in variety of investmnet options like diversified mutual funds, secured NCD, tax free bonds (to save tax) etc.

      • Krishna

        Thanks for the valuable suggestions suresh. Sorry to bother you, regarding Investment banking Jargons, could you please write an article.

        • Sure Krishna. Just do me favor, pls post a request on Suggest a topic. I can post myself for reminder on this link, but I felt I should not do this on my own. 

  • Aniket

    Some pretty unique pointers there, specially Internent assets and Royalty part. These are things that people can do easily these days. Ebooks can be an income earner if publishing isn't working out. Real Estate still rules the roost, but is expensive and not all can look at it, but atleast the other options are manageable and affordable. Overall the post was pretty interesting and to the point.

  • Ravikumar N

    Dear Suresh,

    Apart from all the options you have mentioned, the 4th option: Rental Income from Real Estate is very much interesting. Here, the rental income from a commercial property gives more yieldings for a life long (and even to next generations). The only risk here is finding a right property at a right location. This is a proved concept for earning money for life long. I have done some research in finding such properties in Hyd and found that the locations like Pocharam (near Uppal), Adibhatla (near Sagar Ring road) etc. The rates of the lands here are affordable now and can easily invest. Only risk here is, finding the clear titled land. Apart from this risk, one can invest and rest assure for assured rental income.

    Thanks

    Ravikumar N

  • Kailash

    Thanks Suresh, for sharing this article.

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