A lot of people want to own an income investment, but are unsure how to get started even though they know the basics of investing.
First of all, you have to ask yourself whether you can even afford to invest anything?
Don't Invest Until You're Ready
How much money do you make? How secure is your job or business? Are you still educating yourself, or would additional education advance your career?
How much debt do you have? Do you rent or own your own home? Do you have a spouse? Kids?
Life is complicated, and there are many possible variables -- and they'll be different for every person.
There Are Now Easy, Simple Answers
And there are a lot of ifs, ands and buts.
For example, some financial advisers will tell you that you should not invest anything if you owe any money besides your house mortgage and do not have a three to six month emergency fund set aside.
In general, I'm sympathetic to that line of thinking. However, if you're working at a job where your employer will match any of your retirement fund contributions, I think you should take advantage of that.
When money is taken out of your paycheck and your employer matches it, you've just made 100% on your money. That beats paying off even 30% credit cards. And you'll also benefit from the tax deferral of the money deducted from your paycheck.
Build a Solid Financial Foundation for Yourself and Your Loved Ones
However, for all other forms of investing, even for an income investment, I do agree you should get your finances in order.
Pay off all debts except your home mortgage.
Have a three to six month emergency fund set aside.
If you have kids, start up a college education fund. Take out insurance.
Investigate additional education for yourself. Whether it's a four year degree, an MBA, a Ph.D, an IT certification program, you should invest in any education that will increase your income in the future.
If your current income isn't enough, you may also want to work a second job in the evening and on weekends. Or sell stuff on eBay or used books on Amazon.
You can also check out health savings accounts.
You may also consider investing your time and money into other ways to make money, full or part time. Maybe you dream of starting up a restaurant, or owning a thousand rental units.
If you don't already have a house, you'll want to save up money for a downpayment. Some people believe many more distressed properties will come on the market, cheap, in the next few years. Be ready to buy them.
Don't Invest Money Intended for Short-Term Use
If you do plan to spend on your education, a house downpayment, a business or even a vacation in the next few years, don't invest your money. That implies risk. You could lose money.
Instead, save it up. Put it into a money market account, where it'll earn some interest and the principle will be safe while you're accumulating the total you need.
Remember that True Investing is For the Long Run
Once you've done all of the above, it's time to invest (or invest more.)
1. Take full advantage of retirement plans. Max out your 401(k), 403(b) or federal Thrift Plan at work.
2. Open up an IRA or Roth IRA. If you're self-employed, open the equivalent that fits you and your business.
You can do that a discount brokerage. Choose a cheap, online broker with a good reputation. Personally, I use Scottrade. Use them to buy investments that pay income.
3. Once you've maxed out your retirement accounts, open another account with a cheap, online broker and buy income investments.
I don't know of any good mutual fund for income investors. If you do put money into a mutual fund, do not use a broker -- you'll pay them a lot of money for the privilege. Contact the mutual fund company either by phone or online directly.
Do your research first. Pick a fund with as low an expense ratio as possible. If possible, use Vanguard. They keep their expense ratios very low.
Beware: Many People Want Your Money
Ignore everybody who tries to sell you a system, a newsletter, software, or anything else they claim will enable you to beat the market.
If I'd invested every dollar I threw away chasing impossible dreams, I'd be much wealthier now.
Learn from my experience. You can't trust the hucksters and false prophets. You can trust an income investment to pay you income -- usually!
Author Resource:
You can build a permanent, income generating retirement portfolio. Click here to get the information you need to effectively make money from your investments whether the markets go up or down. If you're ready to discover how an income investment can help you retire with financial security, visit this page, enter your email address into the form and click on the Submit Button. Then go to your inbox and verify that. It's free for the taking. http://www.incomeinvesthome.com/.
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