It’s Income Week here at Rich Retirement Letter!
That means every single day this week, we’ll be laser-focused on how to put more cash into your retirement.
After all, who couldn’t use a little (or a lot) more income in their lives?
My team and I have some exciting surprises for you this week. And we’ve been looking forward to this week for some time now.
I can’t wait to hear what you think about the opportunities that we’re going to share!
To start, you can expect a new actionable income recommendation each and every day this week.
We’ll also cover some new strategies and introduce you to an income expert who has an exciting challenge for you.
Needless to say, it’s going to be an exciting week for us here at Rich Retirement Letter.
So if you could use a bit more day-to-day income or tools to build your retirement wealth more quickly, make sure you pay attention to each of our alerts this week.
Now, let’s jump into our first installment of Income Week…
3 Reasons Every Investor Needs Income
Before I share today’s income play, I want to quickly cover why income is so important for building wealth — even if you don’t need to spend that cash right away.
My experience in finance includes working as a portfolio manager for one of the largest hedge funds in Atlanta.
While I was there, I managed personal investment accounts for some of the most affluent professionals in my community.
And I even started my own fund before I joined our team here at St. Paul Research.
What I’ve found working closely with our ultra-wealthy clients is that income is at the heart of just about every successful investor.
Looking back, I’ve seen three primary reasons why income plays such an important role for both retirees and anyone preparing for retirement.
1: Income investments typically carry less risk.
This is becoming more obvious in today’s market as volatility picks up. But it’s an important thing to keep in mind in all economic seasons.
When you buy a stock, bond, or any other investment that pays income, it gives that investment a tangible source of value.
That investment pays you money and should continue to generate income for years to come.
Compare this type of investment with the purchase of a promising tech stock that might have a breakthrough invention.
While that new technology may prove to be uber-profitable for the company, investors are buying because they have faith in what could happen over time.
That faith can be fickle, driving the value of your investment higher during times of optimism and sharply lower when other investors become fearful.
We’ve seen this fear hit some of Wall Street’s most popular names in the last few weeks, sending shares of some cutting-edge tech stocks sharply lower.
Meanwhile, an investment that continues to churn out income typically doesn’t trade lower in the same fashion.
After all, income investors aren’t as likely to sell a position that continues to put money in their account quarter after quarter.
Bottom line: income investments simply don’t have the same amount of volatility, which means investors don’t have to stomach as much risk.
2: Income investments generate cash for new positions
As the economic picture continues to change, we have to make adjustments to our investment accounts and to the way we approach retirement.
When you have investments that generate cash (either in your brokerage account or off-market investments like real estate), that cash can be used to reinvest in the best opportunities that the market is offering right now.
I saw this strategy in play time and time again at the hedge fund.
Individual stocks or areas of the market would temporarily trade lower. And because my clients always had extra cash flowing in from their income plays, they could always put that cash to work at opportune times.
One of my favorite ways to reinvest income is to use a dividend reinvestment program (or DRIP).
This strategy can be set up with most brokerages or directly with most companies that pay regular dividends.
By reinvesting your dividends into new shares, you’re constantly adding size to your income position.
That means each sequential income payment should be larger, adding even more shares to your original investment.
Over time this setup can compound to make a huge difference in the value of your retirement wealth!
3: Income investments let you focus on what really matters
Here at Rich Retirement Letter, my goal is to help you build your wealth so you can focus on the things that really matter in life.
After all, money is just money.
But if your retirement wealth gives you the freedom to spend quality time with friends and family, to have exciting experiences, and to build fulfilling relationships, that wealth is priceless!
When you invest to generate income, you don’t have to be glued to your computer or follow the financial news every day.
Instead, you can rest easy knowing that your retirement wealth is working hard for you, giving you the cash flow you need for your day-to-day expenses.
In other words, income can make your life richer — in a way that goes far beyond your financial circumstances!
Now that you better understand the importance of income investing, let’s jump into our first actionable recommendation for Income Week…
Today’s “Reopening” Income Play
The income opportunity I’m recommending today is a direct beneficiary of the reopening of the global economy.
Shares of Genuine Parts Company (GPC) hit a new all-time high last week as investors shifted their positions to take advantage of a worldwide economic surge.
As the threat of COVID-19 starts to subside, people are going back to work… companies are ramping up production… and families are taking vacations.
All of this is great news for GPC’s business.
Not only does the company have a huge foothold in the global automotive parts industry; GPC also provides parts for industrial equipment.
Both of these areas are set to surge this year as the world’s economy reopens.
On the automotive side, more people are going back to work and will need to service their vehicles.
In many cases, vehicles that have been dormant a year or more will be even more likely to need parts, leading to a surge in demand for GPC’s automotive business.
And on the industrial side, we’re seeing production pick up in factories, shipping volumes increase, and industrial equipment for producing natural resources ramp back up.
After all, as countries around the world pour money into infrastructure projects, there will be a higher need for materials and industrial equipment.
GPC has a longstanding history of generating income for investors.
In fact, the company has steadily increased its dividend annually for 64 years. That’s the kind of dividend growth that can generate tremendous wealth!
Buying shares of GPC today gives you a great chance to capitalize on the global economic reopening, while also tapping into a growing stream of cash for your retirement.
Consider buying shares today before they trade any higher!
And of course, stay tuned to Rich Retirement Letter throughout this week.
We’ll have plenty of new ideas and recommendations for you to grow your wealth through lucrative income payments!