Emphasize dividend stocks.
The stock market tends to grow slowly over time. That’s one of the reasons why it’s important to diversify your portfolio and invest in a variety of stocks with high growth potential, low growth potential, and high dividends, among other things.
Even though the stock market likes to grow slowly, it still grows – somewhere between 6 to 12 percent per year, depending on where you invest. However, the stocks that make you the most money aren’t the stocks that grow the most, but the ones that pay the most dividends.
“The long-established investment axiom of buy and hold is now far out of fashion,” wrote Time. “Research suggests that most equity funds do worse than the stock market as a whole over the long term, and the side-bet approach … paid off big-time in the 1990s.”
Because companies that are focused on growing their business and increasing their stock price don’t usually pay high dividends, you should focus on the ones that do, which can be found by screening your stock portfolio for dividend stocks.
Cut investment expenses.
This is pretty obvious, but might not be so easy. If you pay high fees to your advisor, there’s no way around it.
You can fire your advisor and pay lower fees if you have a mutual fund account with a discount broker. Some mutual funds charge an annual fee of between zero and 0.3%, which is going to be far less than any advisor will charge.
If you use an advisor, you can also ask them to lower their fees or perhaps even fire them and do it youself.
If you’re using an American robo advisor, you can try one of the many online tools like abir for investment advice that charge low fees or no fees at all.
Minimize trading transactions.
Most investors trade little to nothing when investing on a taxable investment account. As you get more familiar with investing, you will discover that you can safely use tax-advantaged accounts and just do your trades every now and then on taxable accounts. Look at your history of trades and if possible minimize it. In fact you should only do trades when you find value that the market has not realized yet.
Invest in solid dividend generating stocks.
Focus on stocks that consistently yield over 3%. Target these as your long idea to generate income from.
Invest in dividend growth stocks.
You can start investing in stocks that are more aggressive and generate more income by finding stocks that are trending and have a history of increasing dividends.
Buy a true REIT.
You could be losing money in an ordinary REIT that hasn’t done any distributions lately. If you want to keep your distribution income, then you should buy a true REIT that maintains a higher distribution.
Consider non-traditional investments.
Investment property is an increasingly crowded market, and with the current low-interest-rate environment, it's growing increasingly hard to find attractive investments.
One alternative is to look for income-producing commercial properties, such as retail centers that share space with traditional brick-and-mortar stores.
Another may be oil wells. While these properties typically require large amounts of money and a great deal of expertise, they still can be a lucrative investment.
While it's risky and not for the faint of heart, betting on a promising IPO (initial public offering) can be a surefire way to make money on Wall Street.