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How should I invest $300,000 in cash to supplement my current income of $200,000?

I have $300,000 in cash that I want to strategically invest to supplement my income for the long term. I have already maxed out my IRA and 401(k), I have no debt and I make $200,000 a year. How should I invest this amount?

Investing
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February 2018

This really depends on the level of your investment knowledge.  But if you are looking for income/dividends/cash flow, then some combination of dividend paying ETFs and individual dividend paying Blue Chip stocks should be part of the mix.  You could also add some energy MLPs & REITs, but I wouldn't go overboard in any one sector or be lured by higher yields.  A good rule of thumb is that the higher the yield, the greater the risk.  This is because a lower credit quality has to pay more to attract capital, whereas a very solid company doesn't.

Lastly, at this phase in the market cycle, I would have some type of sell discipline in place so as to limit drawdown risks.  This is true for both the stock and bond markets. Without knowing more about your life - spending, retirement age, current net worth, health etc.. , I cannot give you specific answers.

Hope this helps and best of luck, Dan Stewart CFA®

February 2018
February 2018
February 2018
February 2018