Investments To Increase Cash Flow For Stronger Income Planning

Hitting the optimum mix of investments to allow for enough liquidity and ample investment

income potential may be the best approach to income planning for retirement. In these times of highly volatile investments and fluctuating markets, you will need to have enough cash to get you through the times your investments do not earn enough as you would like or need, although you are still required to have enough money invested to receive ample earnings. Aside from putting some of your emergency funds into a merger-and-arbitrage mutual fund (which gives you better returns on your money compared to ordinary savings accounts that result in virtually zero gains), here are some other income planning strategies to help increase overall investor liquidity:

You can purchase dividend stocks when rates are lower. For example, getting stocks that pay dividends and generate decent returns may be a good idea when the stock price dips. This may not be foolproof, but has seemed to serve some investors well over the past few years. For example, having stock in AT&T in the last quarter of 2008 may have resulted in temporary losses due to it falling almost twenty dollars in value per share. However, the same stock is almost at $30 now, which, upon calculation, will have helped you break even and earn a little where this is not so bad considering it suffered under one of the worst stock market crashes in several decades.

You may also sell about fifty percent of whatever speculative stock position you may have by double. For instance, if you have highly speculative stocks that rise fast when the market is positive, you can choose to sell half of them if the increase is a hundred percent or so. Some investors choose this strategy even if they are convinced about the possibility of success from a long-term investment, as it helps them pocket some profit from speculative stock. The best feature of this investment method is that market fluctuations (causing the stock prices to plummet and skyrocket) still allow the investor to get decent gains while retaining the profit potential of the original investment.

These are just some strategies that can help the senior investor increase cash flow from his or her investments. While caution is recommended, especially for older investors, those who have the financial capability to weather some risk and loss should consider these income planning methods that can generate better liquidity.

by: Katherine Smith

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