What do I do with my Money?

Ok so I need about $600 a month in income and I have $171,000 in cash. I want to know how I can earn $650 a month in income without touching the principle at all. I want to eventually leave that to my son. The problem I see is that I dont want a CD because I need to leave it in there for years without accessing the money. I need to pull out $600 a month to live. So my question: Is there somewhere I can put my money to earn $600 a month, every month that I can access without touching the principle? I am retired so I need no risk

Update:

yes I want to save it and collect 7% but no banks that I know of give you that much interest...any other suggestions

4 Answers

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  • 1 decade ago
    Favorite Answer

    The problem I see with your statement is that you want to take no risk, yet earn 4.56% a year. It is not going to happen at this pint in time. My advice is take some risk and get paid for it, although be sure to reduce your unsystematic risk by having a very diversified strategy across many asset classes. That way you have some "good" risk, which you will get paid for and you will not have to dip into your principal.

    Sample Portfolio:

    60% stock:

    6% into Dupont (DD)- 4.8%

    6% into Kraft (KFT)- 4.3%

    6% into J&J (JNJ)- 3.2%

    6% into Waste Mgmt (WM)- 3.6%

    6% into McDonald's (MCD)- 3.5%

    6% into Verizon (VZ)- 6.3%

    6% into Natl Grid (NGG)- 6.8%

    6% into Total (TOT)- 5.5%

    6% into GlaxoSmithKline (GSK)- 4.8%

    6% into Vanguard REIT ETF (VNQ)- 5.85%

    40% Bonds:

    25% into Vanguard Total Bond Market ETF (BND)- 3.43%

    5% into SPDR High Yield Bond ETF (JNK)- 12.45%

    10% into SPDR Intl Treasury Bond ETF (BWX)- 2.21%

    So a lot of these pay dividends quarterly so you'd have to figure out how make that work, but its doable. These figures are based on historical dividends, but I believe we are beginning an economic recovery so all dividends will continued to be paid. If my figures are correct, this would give you a taxable income of $7,900 a year in dividends, which is a 4.62% yield. Good Luck!

    Source(s): degree in finance, with specialty in personal finance.
  • 1 decade ago

    Matt,

    Getting $600 income per month with a principle of $171,000 would require a speculative investment. That means that the value of the investment could go down, the company might decide to stop declaring dividends, or the company could even go bankrupt.

    You may be able to get a relatively safe mutual fund with dividends in the 3% return on investment range. Be careful. When companies state return, they usually include dividends plus the profit you would make if you sold the stock.

    You might also think about a long term municipal bond. This is issued by a taxing authority, such as a town, a county, a hospital district, a toll road authority, and so on. It is tax exempt and very safe.

    Matt, you're not going to be able to get $600, but $400 - $525 is a realistic amount for the dividends or interest.

    Speak to a couple of stock brokers. HOWEVER, remember that the stock brokers loyalty is to the brokerage firm, not to you. They will sell you whatever gives the brokerage firm the highest commission.

  • Anonymous
    1 decade ago

    I agree with the first answer save ur money in a bank and collect the interest.

  • Anonymous
    1 decade ago

    You should save up your money with a bank that is 7 percent! :)

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