If you have the money to invest, it is a great way to stabilize your monthly income, and increase your disposable income. The extra money that you make can be used to pay off any outstanding balances, as well as save.
Luckily enough, there are ways to generate this extra money every month. One of the ways to do this is by investing, and investing in stocks.
While the results are risky, there are ways to invest successfully in order to have that extra bit of income. In this article, we are going to be teaching you how to do that, as well as how to ensure you are getting that extra money a month.
Let’s get started!
Is Investing Better Than Paying Back Debt?
This is a common question for people. It is common to have debts more than it is to invest your money. The answer to this question depends on a couple of things, though.
Firstly, this is the cost of the debt and the interest, as well as the potential income from your invested money.
If the cost of your mortgage interest loan is 4% and the annual return is 8%, it actually makes more sense to not pay off this debt, and focus on investing instead.
However, if the interest rate on a credit loan is 19%, it will be twice as harder to find a good investment return that is worth it, especially without a high risk.
There are a few rules to think about when you consider if you want to invest rather than pay off debt. Think about these things before you make a decision.
- Reduce the price of your debt by putting high-interest debts in a transfer credit card, allowing you to pay off gradually without the massively high interest rate.
- Acknowledge the risk and rewards of investing, including cryptocurrencies, bonds, stocks, and real estate.
- Go through your debts, and make a list to understand the cost of the annual interest rates and fees.
$1,000 A Month Rule
When looking at investing, it is important to look at how much money you will need to have in savings each month, in order to have a pre-tax income of $1,000 a month. This is pretty simple to do, and if you play your cards right, it’s not too difficult.
If you have a deduction rate of 5%, savings of $240,000 will be necessary for you to make $1,000 a month in investments. This equates to $12,000 a year, span across the simple number of 20 years.
It does not have to be 20, but it is easier to work out this way, as well as providing a stable income for as long as you can.
This $1,000 a month rule is based on a few common assumptions. This will be that the savings amount does not change in the same time that the deductions are being made.
Additionally, if the stock market drops by 10% in a single year, the savings would decline by $24,000.
How Much Money Do I Need To Invest To Make $1,000 A Month?
So, is there a way to make $1,000 a month without eating into savings, or accounting for debt? Luckily, there is! Let’s look into some of these options.
REITs
REITs are companies that operate, buy, and own different kinds of real estate, including farmland, commercial, special use properties, and residential lots. It is possible to buy shares in this publicly traded REIT. You can buy and sell this on stock trading platforms, giving you a great option to make $1,000 a month.
By law, REIT is obligated to distribute 90% of its income to shareholders, hence why this may be a good investment opportunity for you. It is estimated that by investing just over $235,000, a residential REIT may gain you almost $7,000 extra income a year, whereas a mortgage REIT can actually make you almost $20,000 a year.
Rental
One of the best ways to earn money is through real estate, and especially the rental market. Real estate investors gain a monthly cash flow by using tenant’s rent to pay for the cost of the mortgage and any other extra expenses.
Half of the rental income should be used to pay for these expenses, whilst the other half can go towards your extra income per month. If you own a property with several bedrooms, or several properties, you can probably exceed the $1,000 a month mark.
Investing anywhere from $230,000 in one property will give you a substantial income of $1,000 for the foreseeable future, as long as you have tenants who are wiling to pay.
Dividend Stocks
High-paying dividend stocks such as Kinder Morgan, and Altria Group have an annual yield of 5% or more, making them a substantial stock to invest in. If you invest enough, you can make close to $2,000 a month in returns from these stocks.
High-Yield Bonds
Investing in high-yield bonds ins another way to make that extra money a month, but this comes with a higher risk. Bonds pay more interest, so there is more risk of losing money.
A way to counteract this is to buy shares of an ETF, changing the annual dividend to become a lot less risky for you. You could expect to make anywhere from $17,000 a year with high yield ETFs.
Final Thoughts
As you can see, there are many ways to invest to make $1,000 a month, and it turns out you do not have to invest too much. In the long run, you will probably want to invest around $200,000 to receive a consistent and gradual income of over $1,000 a month.
That is why I made my site - Stock Maven. Now that I feel settled and confident about trading, I want to be a source of help to anyone else who might be struggling to break into the crypto market successfully.
My website is full of my tips and tricks, as well as information that I have always found interesting about crypto. My friends and family are sick of hearing me talk about it, so now it’s your turn!
I hope that you stick around and find something useful on my site. Remember, to make it big in crypto, you’ve got to be confident! Go for it and don’t look back.
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