Making An Income Steam From Your Long Term Investments PDF Print E-mail
Written by Shaun Rosenberg   
Sunday, 14 February 2010 14:05
We all know that over the long term investing into the stock market is a profitable thing. But this does not mean we can't look for ways to make monthly income off of our long term investments.
by ShaunRosenberg


We all know that over the long term investing into the stock market is a profitable thing. But this does not mean we can't look for ways to make monthly income off of our long term investments.

So, how can you get some extra cash flow off of your long term investments? There are a couple ways to go about doing this.

1. Buying Dividend Stocks

The easiest way to make passive income from your long term investments is to simply buy stocks that share a portion of their profits with their investors. This is called dividend investing.

The only problem is that you need to invest a lot of money in order to get any reasonable income. But there are ways to make even higher returns.

2. Using Covered Calls

Covered calls allow an investor to make money by selling others the right to buy their stock from them at a specific price. For example, if you own stock ABC and it is trading at $60 you can sell the $65 call on it and make a premium.

The only disadvantage here is that you will be obligated to sell the stock early if it goes above $65. It can be a great way to make an income, but only if you are willing to part with your stock.

3. Naked Puts

Another way to make money would be to sell a put. This means you are getting paid to be obligated to buy a stock in the near future. If you sell the $30 put on a stock that you want to own then you will make money up front and end up getting into the trade if the stock closes below $30 before expiration.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Combining naked puts and covered calls with fundamentally strong stocks paying dividends can help you make cash flow now and long term growth later.
Last Updated on Wednesday, 11 August 2010 14:28