Top tips for investing for income | Charles Derby

Top tips for investing for income Sadly it looks like low-risk income generation is a thing of the past in a world of low interest rates and quantitative easing. But there are opportunities beyond cash and government bonds; here are our top tips. • Start by being tax-efficient to increase your net income by using an ISA • Look to the long term -- Investing for income is all about the compounding returns for the long term. Pick businesses demonstrating consistent returns and visible earnings streams. • Select reliable sectors that don't just rely on strong economic growth to deliver attractive returns. • Don't forget inflation -- it hurts. Property or equities are better placed than corporate or government bonds to deliver income that rises to keep pace with inflation. • Diversify -- Spreading your risk is particularly important if you cannot afford to lose capital. • Look at cash flows -- Dividends are paid from free cash flow, so the bigger the better • In the short term, sentiment affects share prices but over the longer term, dividend growth is the key determinant of long-term share price movements. You can still achieve your income goals but you need to look beyond cash and government bonds and may need to take on some more risk. We can help to explain your options and find best way to proceed. Please call us. Charles Derby Financial Planning Consultants are on hand to provide all the knowledge and help you need. Contact us today on freephone 0800 849 1279 or email us at info@charlesderby.com

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