Income Generation


Many of our clients desire that their investments generate income. This is particularly important during retirement. Income generation, which is achieved through stock dividends and bond yields, has been a specialty of our firm for many years.

We total your monthly income from all sources, and then subtract that number from the amount that you need to live each month. That, then, is the amount that becomes our monthly income generation target figure. Of course, your total return is our primary objective, in addition to your income generation goals. Income generation and growth are not mutually exclusive. We endeavor to continue growing your assets while you are getting paid each month from your investments.

We can ladder the dividends and yields so that they are electronically deposited each month, on any day of your choosing, into your personal checking or savings account. These dividend/yields are periodic and systematic and represent what many come to rely on as “retirement paycheck”. Some clients are able to cover all their living expenses through their investment income and leave their principal untouched, with the objective of continued growth.

Income Generation FAQs

Question:  How do you choose the investments within my portfolio that generate income?

Answer: Not all investments within your portfolio will provide income, but we lean heavily on those that will. We look for companies whose share price has appreciated over time and who have a history of increasing their dividend payouts to shareholders. These increasing dividend payouts represent a solid hedge against inflation, which is especially important in retirement. We carefully select companies to build a well-diversified portfolio that spanning industry sectors in an effort to minimize risk.

Question:  Will all the income generating securities you choose be stocks, or will there be some bonds as well?

Answer: We will build your custom-created portfolio with your age, risk tolerance and financial objectives in mind. Each portfolio is different. Generally, we like a mixture of equities and fixed income instruments.

Question:  How will I receive the dividend payments and bond yields?  How often will I be paid?

Answer: We will set up a link directly to your checking or savings account and the dividends/yields will be deposited each month electronically on the date of your choosing. Some dividends pay monthly, some quarterly, and some semi-annually, but we will ladder the payouts so that you are receiving a periodic, systematic stream of income, in an amount that you can count on, each month on the same date. It’s like a “retirement paycheck”.

Question:  Can you tell me how much income you can generate for me each month?

Answer: Normally, based on your account balance and risk tolerance, we can estimate in advance pretty closely what can be generated.

Question:   Is it possible to live off my dividend payments?

Answer: Yes, depending on your cash flow needs and if the account balance is large enough. This is the ideal scenario for many retirees for a couple of reasons.  Their principal remains untouched while we endeavor to continue growing it, and the majority of their income (through investments) is taxed at the capital gains rate rather than at the ordinary income rate.