Income-Based Investment Strategies
Although the growth-based financial strategies you used during your working years might have been effective in helping you grow your retirement savings, those same strategies could jeopardize your financial security in retirement. We believe the best way to avoid that risk is to work with an income with an income specialist who can use income-based strategies designed to help you preserve your savings so you can use it as a source of Evergreen Income.
Income-generating investments can establish a lifetime income strategy that allows for better certainty around your financial future. This doesn’t mean that you cannot remain invested in the stock market. For those with the ability to endure some level of market risk, dividend-paying stocks can be a viable way to invest for income.
TR = I + G
Focusing on income investing eliminates the need for a withdrawal plan to provide income. Withdrawal plans (selling shares) are flawed because their success depends on market growth, which is a huge unknown. While the market may grow most years, if it shrinks you won’t be withdrawing from gains but rather spending down your principal.
Importantly, “growth” and “return” do not mean the same thing. Total return (TR) is a sum of two things: income (I) and growth (G). While growth is measured in capital appreciation, income is generated through interest dividends.
In our experience, the best way to ensure you won’t outlive your money is to have a strategy that generates Evergreen Income through interest and dividends, because:
- When you live off interest and dividends, you’re not spending any principal and removing some level of market risk.
- You can keep growing your money more safely through strategic reinvestment.
- You’ll generate Evergreen Income regardless of market conditions
Let us help you prepare for a secure financial future The Pinehurst Wealth Way. We have the knowledge, experience, and resources to design a customized, diversified, actively managed portfolio of income-generating instruments suited to your individual goals, needs, and risk tolerance.
Learn more about how to help make your retirement more evergreen.
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