What are Stream Investments?

What are Stream Investments?

Profits made from general investment in income funds include interest income, pay dividends, capital gains on stock sales, and bonds. The interest earned from bank accounts, dividends from stocks held by mutual funds, and profits from gold coin sales are also considered income from stream investments.

With that said, stream investments are primarily about generating stable, quick returns with a reasonable level of risk. It is important to have a solid foundation for your portfolio by investing in income-producing stocks, bonds, and other assets.

Diversification of your risk can be achieved by investing in multiple income-oriented opportunities, some of which are shown below.

Stream Investment Ideas

Stream investments offer the greatest potential for passive income generation and general investment in income funds, but acquiring meaningful returns may require large sums of capital. For income streams, here are some of the best opportunities to invest in.

Dividend Stocks

Investors benefit from dividend stocks by receiving regular payouts from company profits. If you want to earn significant income from dividend stocks, you will likely need to tie up thousands, if not tens or hundreds of thousands, of dollars.

It is important to note that dividend investing comes with some risks. There may be times when companies cannot pay dividends out or must reduce them due to financial difficulties. In order to find higher dividend yields, you should look at preferred stocks or dividend aristocrats.

Dividend Index Funds and Exchange-Traded Funds

Rather than selecting individual stocks, it is also possible to invest in index funds or exchange-traded funds (ETFs) that hold dividend stocks. People who prefer a hands-off approach to investment can use this form of stream opportunity.

The S&P 500 index fund, for example, holds a well-rounded selection of many stocks attempting to mimic the index’s performance. An index fund investing in dividend-paying stocks will contain a selection of stocks that pay dividends. A portfolio may be more risk-balanced with index funds as market swings tend to be less volatile across an index.

The dividend ETFs combine the diversification benefits of index funds with mimicking the ease of trading stocks. A brokerage account is required if you want to invest in dividend stocks, index funds, ETFs, 3C1 funds, and other traded assets.

High-Yield Savings Accounts

High-yield online savings accounts are another way to earn passive income, albeit at a lower level than stocks and bonds. These savings accounts pay interest, which is then credited to your balance.

Federally insured high-yield savings accounts earn interest rates that are often much higher than national averages. There may be a slight difference in the annual percentage yield of these high-yield accounts, but over time, those small differences can add up to real cash, so it pays to choose the right place to save your money.

Peer-to-Peer Lending

Essentially, peer-to-peer lending involves lending money to someone else, usually through ready-made platforms. Once the initial loan amount is repaid, you will earn interest.

Peer-to-peer lending carries a significant risk of default on the part of your loan recipient or recipients. To minimize that risk, you can spread your funds across several loans. As long as you meet the income or net worth requirements of the peer-to-peer platform of your choice, you may be eligible to participate. 

Real Estate

One of the oldest methods of generating passive income is through real estate ownership. The fact is, there’s a lot more involved than just buying a house or a piece of land.

A rental property’s repair and maintenance requirements can consume a considerable amount of your time and money—unless you hire a property manager, which will only further reduce your earnings. Furthermore, the upfront investment in real estate can reach hundreds of thousands of dollars.

Consider investing in properties through alternative sources, such as real estate investment trusts (REITs) and real estate crowdfunding platforms, instead of traditional real estate investment vehicles. All you have to do is check that crowdfunding doesn’t require accreditation to invest.

Benefits of Stream Investments

Stream investments can provide you with a stable income as well as a variety of other benefits. A few of them are listed below:

1. Provides a Supplement to Fixed Income

The purpose of stream investing is to supplement one’s fixed income on a monthly/annual basis. It’s an excellent way to earn additional income from assets one owns, which can be used for daily living expenses.

2. Potential Growth in Capital Stock

Capital stock growth is possible with stream investing over the long term, which can contribute to wealth accumulation.

Are Stream Investments Right for You?

In general, stream investments are associated with older investors, often retired individuals. As a person ages, common financial wisdom indicates that portfolios should shift from growth to stream income. Investors should, however, include some income-producing assets in their portfolios—at the very least to balance aggressive growth assets.

If you would like to build wealth but aren’t sure how, we are here to help. Find out more about stream investments, general investment in income funds, and low-risk, high-yield investments with our team of financial experts. Feel free to contact us at info@saintinvestment.com or call us at 949-881-7128 at Saint Investment Group today!