How to Create a Monthly Income From The Stock Market
This blog post originally appeared on Luca Fury's website.
The stock market remains a mystifying entity to a lot of people. After all, it is something that many of us see in movies and television shows as some distant, complex system that seems to somehow impact our reality, though we are not quite sure how. At least, that is the way that some people think of it. Others look at it as a place where they can build a nice nest egg, which includes a monthly income that they can easily rely on.
Monthly Income Generating Stocks
Many people purchase stocks for their dividends, which is defined as a set amount of money that the companies pay out to their shareholders simply for holding the shares. Obviously, the company is allowed to change their dividend payouts at any time, but most of the time they tend to leave them alone or even add to them to reward their loyal shareholders.
While dividend investing can be a nice way to grow your money, most stocks only pay out on a quarterly basis. Therefore, you might consider a few stocks that have altered the model to ensure they pay their shareholders on a monthly basis. This allows investors to more readily enjoy the spoils of their dividends on a regular basis. Companies like LTC Realty and Realty Income are just two stocks worth looking into for this purpose.
If you want to spice things up a little while still earning a monthly income from your stocks, you might want to go with what is known as a covered call strategy. This is a strategy whereby you hold the shares of a particular company and at the same time sell call options to those who want to speculate on the price of your shares.
It is possible to earn an income by pocketing the premium money that the other investor places for the options, while at the same time getting to hold on to your shares. The only way that you have to sell is if the price goes up high enough to reach a predetermined price based on the option. Even then, you would be selling your shares at a higher price than what they are currently are trading for.
Regardless of the other investments you currently or intend to make, either of these methods can establish the kind of supplementary, monthly income that you wish to receive by the stock market.