I have over $150,000 in CD that gives me 5.3%-I get about $800 a month...I need the income---like the safe principle--but would be willing to risk principle for a higher rate paid out at least quarterly.. any idea?/ thanks Michael
Well, it would have been nice to have a bunch more information such as your age, what other money and income you have, and how much more you need each month. In the absence of all that, the best I can suggest is see your financial planner or banker about income funds. It might be appropriate to put a portion of that $150K into income funds. Just don't get conned into paying a big fee or sales commission for doing that.
-john-
You should go to a brokerage site like Fidelity.com or Vanguard.com and look under the section called "income". These are aimed at the newly retired who want to make income from their savings while taking minor risks. An immediate annuity pays over 6% and higher if you are over 50 (inflation risk). There are newer "hedge" income funds that contain both long and short investments to maintain a premium of up to 3% over treasuries (market risk). There are high-yield bonds and high dividend stocks which have some element of market risk.
Michael,
You could buy a high rated preferred. Generally, they pay quarterly. You aren't going to get the safety of FDIC insurance, but there are double and triple-A rated issues that should provide you with enough piece of mind. Preferreds these days are really 30-year or longer maturity bonds that are callable anytime after five year. Usually they are issued at $25 par amount and are listed on the NYSE. The most important thing to keep in mind that as securities, unlike a CD, their price will fluctuate with interest rates, credit events, liquidity, and any other risk associated with bonds, sometimes more so given the maturity and whether the call is "in the money" or not. You may be to purchase one that is QDI eligible, where the dividends are taxed at 15% rather than ordinary income. You can purchase them through any broakerage firm, but I would suggest dealing with one that knows tha product well so as to explain all the ins and outs. Hope this helps.
If you are NOT concerned with retaining the Principle, then you should look into the use of an:
Immediate Annuity
If you are NOT familiar with this, it is a annuity that pays you a Guaranteed income for (at least) LIFE . Depending on your age, you could receive anything from $1,200 to $1,500 a month for as long as YOU live.... Cal Lester CLU
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