Most investments are long-term, and you should go into them with the understanding that you won’t have access to the money for a while. And, in many cases, you might not see a high return. There are a few investments that are more likely to see you with some monthly income, though.
The first place, which might not sound exciting, is a savings account that you actively deposit into. Look for a high-interest account, and put in as much as you can. Keep topping this account up, and you will see a month’s income (albeit potentially small) via interest.
The big bonus for putting your money into savings is that it is safe. It could be interesting to understand more about compound interest, though!
Almost the first thing that will come to mind when you talk about investments in stocks and shares. You might even get flashbacks of The Big Short or The Wolf of Wall Street. Thankfully, you won’t need to go quite so wild.
Many stocks pay a monthly dividend – which means so long as yours are doing well, you’ll see a monthly income.
You’ll need to do some research into the type of stocks you might like and your risk appetite: Best Dividend Stocks UK 2023 – Safest Dividend Paying Stocks.
Bonds have less risk attached than stocks and shares, and you can even invest in government and corporate bonds. Government bonds are the safest option as they are underwritten by the UK Government. You will often see these referred to as gilts, and if you have a larger amount to invest, this can be a great option.
Buying a property with the idea that you will rent it out is a guaranteed source of a set monthly amount. Although there are some considerations, like regular maintenance and being a good landlord, these can be a second source of income. Holiday home rentals can work well, but for most people who want a regular income, residential property is ideal.
If you are in the position to do so, you can use a buy-to-let mortgage to purchase a property specifically to rent out.
For those who don’t have time to manage properties but want to invest in property, the option to take part in crowdfunded property investments is possible.
ETFs, Exchange Traded Funds, are worth considering if looking specifically at a monthly income from them. They are a combination of mutual funds, bonds and stocks. You get a wider range of things to invest in but have lower expenses. What’s more, is that these can be sold or bought any time of day.
With any investment, it is important to look at the pros and the cons – because there will be several pros for any investment. And, if it looks too good to be true – then it probably is. Perhaps you already have some smaller investments and are looking for ways to build more of a nest egg: How to Build an Investment Portfolio.