[Bianca]

How would you invest $250K to max income?
How would you invest $250K if you wanted to get ~$2K a month in income?

I’m not looking to make a lot of income this year and then be down 50% next year.

welcome your thoughts.

[Iris]

30k of that is a small fraction, but that’s all you’d need to put into MSTY to get about 2k in dividends per month & reinvest to build up more shares monthly…

then let the 220k ride in long term etf (VOO/VTI/SCHG etc)

[Christopher]

That’s almost a 10% yield. That kind of instrument doesn’t exist – you will have to take substantial risks (and may realize substantial loss) to achieve a chance at those kind of returns.

[Holland]

Put it in index funds and it won’t be down 50%. Rarely has the entire market (VTI) returned a negative number.

So put it in VTI or VOO and dont look at it for 10 years.

[Frank]

If you try to “max income”, you are also going to max taxes. You will not have that kind of income regularly without taking substantial risks.

You can currently earn over 7% in qualified dividends with a preferred shares fund like PFFV, but there won’t be any growth.

If you try to use covered calls or other levered strategies, you will find that your investment tends to decay over time and you are really just robbing Peter to pay Paul.

I don’t see the value in investing for “income”. What you really want to have are just liquid resources that can be tax managed.

[Connor]

The investment you are after doesn’t exist, at least not as a guaranteed thing. You are looking for high income producing (10% annual return is VERY high), low risk, and consistent.

If there was some magic investment like that, people would be doing it all the time.

Your criteria isn’t really realistic unless you maybe open a meth lab or something.

[Eva]

Invest in what? What are the constraints? Is the 250k liquid? What alternatives exist?

Could you clarify what yon mean by being down 50% next year being your only alternative?

[Lexi]

As others are saying, you have to get creative and start making your own investment/entrepreneurial opportunities.

I can think of one that matches your expectations but it wouldn’t be open to you, because it is based on my connections and my network.

So, you have to start getting out there, get creative, and get inspired, and make your own opportunity.

[Rick]

Private real estate lending but it takes a lot of market, house evaluation, and borrower knowledge to reduce its risk to tolerable levels.

And a lot of work as these are typically shorter term notes like 6-36 months do you will have to rinse and repeat which can cause downtime impacting returns.

And it’s not super tax friendly.

[Jake]

Definitely real estate. Otherwise it’s near 10% rate of withdrawal and you’d likely deplete the value of your investment over time.

With real estate you could get this with $250k without too much difficulty if you live in a decent area for it.

Hiring a property manager might make it a little harder but even then I think it’s totally doable.

Around me buying something outright cash for $250k should bring in at least $3k per month and you should be left with at least 2k per month after expenses, that’s the average.

But I would end up buying multiple properties leveraged 75%, so to parallel previous example that could be 4 properties that are $250k each.

After adding the mortgage to expenses the income is around $36k per year.

[Prasad]

Without taking anything out of the $250k? That’s highly impractical.
If I were you, I would invest the $250k in golden ratio portfolio (look up risk parity radio) and draw 0.5% per month (6% for the year).

That will bring $1250 a month. Then figure out how to bridge the gap from elsewhere. (Also, take taxes into account.)

Then reduce the withdrawal rate to 5% or less from next year.

[Author]

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