At first glance, it seems that a hefty initial investment is required to generate any significant income in today’s environment. The average annual dividend yield of all S&P 500 companies right now is 1.88%. So if an investor wants to earn an extra $10,000 of income a year from dividends, simple calculation shows that they would need an initial outlay of $531,915. As a result, some people have ditched the idea of income investing altogether and moved into the more profitable—but also significantly more risky—business of trading. But before you put your money in the hottest high-momentum tech stock, note that you don’t need to be an ultra-high-net-worth individual to earn a decent return from an income portfolio. In fact, the company I’m about to show you is now paying investors $10,000 a year on just $123,457 of initial investment. Better yet, the checks are mailed out to investors on a monthly basis.
The company in question is Gladstone Investment Corporation (NASDAQ:GAIN), a business development company (BDC) headquartered in McLean, Virginia. For those not in the know, BDCs are closed-end funds that invest in small- and medium-sized businesses. Compared to venture capital funds that also focus on early stage companies, BDCs are different because many of them are publicly traded. This means small investors have a chance to in tap into the growth of these companies and liquidity is not an issue. Here’s the best part: BDCs are structured as regulated investment companies (RICs), meaning they pay little or no income tax at the corporate level. In return for having this tax pass-through status, they are required to distribute at least 90% of their taxable income to investors in the form of dividends.
Source: Income Investors
Related Articles:
- Dividend Stocks vs. Dividend ETFs
- Managing Risk With Dividend Stocks
- If Only I Had Known About These Dividend Stocks...
- 13 Dividend Stocks and 3 ETFs To Balance Your Asset Allocation
- 4 Communications Services Stocks With Increasing Dividends
_____________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Do you need more income? Join the crowd. It seems everyone is scouring the landscape these days for decent income investments to beef up the...
-
There are some dividend aristocrats which have not only maintained but increased their dividends for over half a century. Having survived ev...
-
In bull markets, dividends become more or less irrelevant. When the Dow Jones Industrial Average traded above 14,000 in 2007, very few stoc...
-
While I've invested a decent portion of my portfolio into growth stocks, a significant part of my holdings consists of dividend-paying s...
-
Investors hear about dividend aristocrats all the time. It’s a fantastic thing if a company raises its dividend every year for 25 years runn...
-
Stocks can make for amazing investments, offering better long-term returns than bonds, precious metals, and most other commonly available in...
-
All too often when a cheap stock offers a high dividend yield, it's too good to be true. Perhaps the stock has plunged with good reason,...
-
Anxiety over the European debt crisis and distrust in the markets drove volatility in global stock markets to dizzying heights in 2011. The ...
-
To alert investors of stocks that have the highest risk of reducing their current dividend in the future, Simply Safe Dividends created a Di...
-
April has time and again proved to be favorable for stocks. But this time around, April has arrived during midterm election, which usually s...
0 comments
Post a Comment
Post a Comment