Lisa asked in Business & FinanceInvesting · 1 month ago

What is a good investment that brings monthly income?

My parents sold their house and want to do something with the money that will give them a monthly income. Savings account gives nothing. Should they invest in stocks or bonds or is there something else?

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  • 4 weeks ago

    All of the above - Savings, Stocks, Bonds, and a little inflation protection.  The general rule is from a well balanced diversified portfolio you can take 4% per year out and over the long term you shouldn't deplete it.  But with the low interest rate environment many financial professionals now think its only 3% you can withdraw per year. 

  • B
    Lv 7
    4 weeks ago

    how are they living, do they need a guaranteed income. these are questions for the parents. stocks are risky and the market is at an all time high.

  • 1 month ago

    How reliable do they need the income to be?  If they can live without it from time to time, I'd say they should put it in a broad-based index fund, like one at Vanguard.  In addition, in the US, capital gains are taxed at low rates, sometimes zero, depending on their income.  They can draw small amounts off the fund each year.  An old guide is to take 4% of what is in the fund every year.  But in some years, maybe even years soon to come, the market will go down, and they might not want to draw anything out at all.

    If they need something more stable, then a bond fund at Vanguard.

    If they cannot tolerate losing anything, then a CD at a bank is about the best they can do.

  • 1 month ago

    They can buy dividend-paying stocks. They don’t have to worry about the stock price going down as long as they don’t sell it during low prices. Or they can get an annuity that pays a monthly dividend. I do like real estate but they would need to spend time managing it, and to learn what they’re doing.

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  • Anonymous
    1 month ago

    Savings accounts are risk free. Other higher yielding Investments have risk.

    If they have $100k and buy a fund that pays 7%, they would get around $583 a month from it. However, there is the risk that the investment goes down in value.

    One fund I have owned for a long time is UTF. However, if the stock market declines 15%, this fund will likely decline a lot too.

    https://www.cefconnect.com/fund/UTF

    • The Old Guy
      Lv 6
      1 month agoReport

      Savings accounts ARE NOT considered as "risk free" since they are subject to inflation and possible changes in interest rates.

  • Sandy
    Lv 7
    1 month ago

    real estate. they could buy a multi-unit building and rent out all the units. if they pay cash for it, all the rent money is theirs. they'd still have to pay insurance, property taxes, gas and water though.  they could also save some money by getting one of the tenants to manage the building or pay a company to do it. But they should still make a tidy profit.

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