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Lookin for low risk with income? is it possible

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January 20, 2013 – Comments (2)

Hi, I'm looking to liquidate some of my assets in residential real estate because its getting too physically hard, i'm looking for something more passive, but i don't want to lose my initial investment.  I made a lot in my 401k and I lost a lot but it was all managed by someone else, now all my assets are in real estate and i want to get back to a more passive income.  I'm starting with 60,000.  Got any ideas? thanks so much, ps. we are retired

2 Comments – Post Your Own

#1) On January 20, 2013 at 3:37 PM, awallejr (81.55) wrote:

Well there are too many unanswered questions to try to give you advice.  Given your mandate of not to lose your initial investment the only option I see is for you to put the money in a CD.  Since it is under $250,000 it is fully insured by the FDIC.  You won't make much income off it though.

The next tier would be buying T-bills.  They pay a little more interest than CDs but you could lose principal if you needed to sell them for some reason.  Otherwise if you held to maturity you will have not lost your initial investment.

Since your risk tolerance is basically zero I can't think of anything else to suggest.  Remember what kind of returns you want are a function of risk.  The higher the risk the greater the potential reward and the greater chance for loss too.

For income I personally have invested in MLPs, BDCs and Reits (8-12% income range on average).  But since they are stocks there is greater risk.

You could also check out annuities from AARP for example or other insurance companies and financial institutions.  But again there is risk since there is no guarantee that those companies won't go belly up (not sure if you are insured for principal).

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#2) On January 20, 2013 at 3:44 PM, HarryCarysGhost (99.68) wrote:

Personaly, I like blue chips for relative safety-

WMT,KO,IBM,CVX,PEP,PG,XOM,UTX,MCD,MMM.

I have been following an ETF holding all of the above mentioned stocks- VIG.

Cheers, and all the best in your future endevours.

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