How can you generate income in the current low interest rate environment?

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Where can you generate income in a low interest environment? Financial expert John Browning explains this in an easy-to-understand way. If you want your investments to generate more income, listen to this episode.  

Welcome to the build your life podcastwith John Browning. Build your life as a relaxed and unedited conversation with financialexpert in number one Amazon bestselling author, John Browning Jones, the founder ofGuardian Rock Wealth and serves clients across the United States. John's the author ofthe book build a life, not a portfolio, a guide to your financialfuture based on your personal values, which you can purchase on Amazon, orstay around to the end of today's show and I'll tell you how to geta free copy mailed right to your door. I'm Michael The lawn, your hostfor the next few minutes as we chat with financial expert and business ownerJohn Brownie. My John Browning, welcome to your podcast. How are youtoday, sir? I'm doing fantastic. I've got much better weather than Ithat I've had for a month or two, so that's good and seems like myspirits just get lifted that much more...

...when I've got sunshine and not somuch rain. So absolutely, absolutely well. I'm glad that you're doing fantastic,because I'll tell you what's not doing very fantastic, John, is mymy my money that I have in the bank right now because it's not generatingvery much income for us because we, I mean, interest rates are low, which is great if you have a loan, it's just not very goodif you've got money invested or something. So my question today for you is, how can you generate income in this current low interest rate environment that we'rein? Yeah, that's that's been a big question for the past few yearsand really the past year in particular, because if you first of all,if you look at the money that you have in the bank, and wetalked about this an episode or two ago, you're learning less than half a percentagepoint, which is putting you behind every single day that you have itin there, because inflation is eating away at that much faster than half apercent well, the same thing holds true...

...if you take a little bit morerisk and go out further on the curve and buy a longer term bond orfixed income security. The the race that you're getting there are below the historicrate of inflation. And unless you start taking even more risk, which issomething that fixed income is not really supposed to be doing for you. FixedIncome Portion of your portfolio is supposed to be number one, providing fixed incomepreferably above the rate of inflation. And number two is supposed to add somestability to your portfolio. And and what we're finding now, and have forthe past several years, really the past almost almost decade now, is thatbecause of where rates are, and this is this kind of gets complicated.I don't want to confuse people. I'm happy to talk to them oneonone whenI can give them oneonone actual financial advice. This is not but what's happening now, with rates so low, is...

...that it's becoming more and more volatile, because that's how the math of fixed income work. So used to managefixed income portfolios back when we add. Yeah, so, that used todo that on Wall Street. So, so I like fixed income, butit's just not doing the job that most people needed to do. So howdo you create right? Told you what doesn't work. Is So John,when you're going to get to the point? Right? Right, rn, soit courts. It depends, right. Everything depends on the objective of theindividual risk parameters, on all of that. But generally speaking, ifyou're in need of ongoing income, so you need to pay the bills everymonth, you don't necessarily want to be generating capital gains and then are theylong term or short term? And what are my taxes? It makes ita little bit more difficult. So you may want to have some securities inyour portfolio that are generating it enough to...

...at least cover most, if notall, of your ongoing monthly needs. Most of us have monthly bills,whether it's a mortgage or utility payments. At least we've got right. SoI'll give you some of the steps that that we go through and we're lookingat it and there's some mistakes to try and avoid here too. So there'smany ways to invest for income, but I'm just going to talk about afew. Most importantly, you've got to understand that high dividend yields on stocksor interest or high interest rates are not necessarily good investments for you because theymay have more volatility than you realize. It's really nice to get that checkevery month or every quarter, every six months, but you may not realizewhat the underlying risk is and that's where somebody who has the right experience can, can really, can, really add...

...a lot of value. The coupleones that you should look out for are closed in funds. Again, I'mnot saying these are bad, but you have to be very careful with howmuch risk is built in there, because they do tend to use leverage andthat's borrowing money to Jack up the rates for you the investor. Again,not bad as a portion your portfolio, but be where. I've taken somany calls over the past thirty years with people upset that they're they're fixed income, they're safe, quote unquote, portfolio just dropped in value, maybe evenmore so than they would have expected their equity physician. So funds can dropvery quickly. So be careful. For preferred securities is another way to generatesome income. Bought here again, you can expose yourself to greater than youreally want to have in terms of sector exposure to the financial industry, andthen you also don't have a lot of...

...capital appreciation, typically speaking, withpreferred securities, but still good to have potentially a portfolio. And the otherthird one that people use a lot and can be very dangerous are mlp's ormaster limited partnerships. They can have tax and tax implication. Sometimes you buythese on the exchange and you don't even realize that it's an MLP and suddenlyyou've got a tax issue. You got to wait at tax time for ak one form that comes before you can do your taxes and it just becomesa big can become a big headache and less your CEPA or or whatever.Yeah, the other good one to potentially use and a way to get someyield, but you have to be very careful with and know what you're buying, is reats or real estate investment trusts. But here again there are good onesand bad ones. In particular,...

...many of the reads out there thatare private reads, put that in quotes, can be much more risky than someof the publicly EGS, you know, exchange treated ones. Also, whatsector of the read market are you in? There's some really great opportunitiesout there, but they meet on he is higher yield, but those higheryield ones may be more risky than you should have for your risk parameters.Okay, so selective. Second Yeah, wow, let us so, letme, let me, let me bring this down to my level. Sowe started talking about how do you generate income in the current low interest rateenvironment? That was the question. Who answered it like a Master and Ilost you somewhere along the line. But basically, here's my answer. Isit is possible to generate income, even in a low interest environment, throughdifferent sectors or through different strategies. Let's...

...just say it. It is possible. Correct, that is correct. Yes, awesome, all right, that's thereal answer. The people are looking without. I'm looking forward that.I mean, do I have to settle for five percent or point o fivepercent? Know there are ways to do it, but you need to reachout to John to have that conversation, because we're not going to do thathere on the podcast, that's for sure. But I think that's really that,because most people say, well, you know, I and twerits arelow and I'm just going to grant and bear it and what I can do, what I heard you say, is, you know what, I'm going tohelp you a grant and maybe actually make some money, because there aredifferent ways, different strategies, different different vehicles, for lack of a betterterm, that that are out there that John understands and knows about, towork with your risk tolerance, your portfolio, the life that you want to buildand and be able to manage that so that you can build a life, not a port not just a portfolio,...

...and actually generate some income in alittle interest environment. That's fascinating. So if yours intrigued as I am, reach out to John Browning Guardian rockwellcom and have that conversation, because that'sreally, really interesting, John. That's awesome. Yeah, that's that's thekind of stuff we love to do here, is show people how they can makethings work to them, even for them and their portfolio, even whenit seems like all the traditional things that they've used for the past twenty thirtyyears don't work anymore. Well, that's the innovation of the market. It'sthe evolution of the market and there are things you can do. And youknow, those are just some of the things that we use. There's alsoways to generate income while you are reducing your volatility, but that probably goesbeyond the scope of of Yes, well, just just once again, you you'veopened up a can of worms and and basically have shown your cards togo. You know more about this than...

...most of us put together are goingto be able to do, because this is where you've lived your life andthat's why people just need to reach out and have that conversation. So,Guardian Rock wealthcom, schedule a zoom call or phone call with John Browning andjust talk to him about life and how you what you're wanting to do nowand what you're want to do in the future, and see if there's agood spitche if he can help you. It's going to be a great conversation, John, thanks for answering that question. That you can generate anything tem ina low interest environment. Reach Out, talk to John Browning and we willtalk to you. I'm guessing the next episode. That's right. We'lltalk to you in all right, take care, man, all right.Money really is a big part of our lives and John Browning can help youand your family learn how to keep money in the proper perspective. It's important, but it's only a tool that can help you build the life that youwant. If you like, John Emilie a free copy of his book builda life, not a portfolio. Go to John's website, Guardian Rock wealthcom, and click the contact to US link...

...and send your request. John WillMell a copy of his book right to your door absolutely free. Thanks forlistening to building your life podcast with John Browning. Be Sure to subscribe tothis podcast so each new episode will be sent to you automatically when it's released. Have a terrific day.

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