Most people don't have a million dollars to invest.
It doesn't matter. What I'm going to show you applies no matter how much money you have to invest -- whether it's $100 or $1 million.
But there is a sad truth about a million dollars. Even that heady amount wouldn't earn you much in regular income -- if you put it to work in the "traditional" ways...
$567. That's the most you will get each month if you put that $1 million into the average 1-year CD, which, according to BankRate.com, is yielding just 0.68%. For comparison, the average Social Security check is $1,269 per month. In other words, you'd earn more from Social Security than you would from $1 million.
It's a similar story with a number of other investments...
10-year Treasury Note -- Sitting near historically low levels, if you loaned the federal government $1 million, with annual yields at 2.6%, you'd only earn $26,000 a year... or $2,600 a year on $100,000.
Savings Accounts -- With a maximum yield of 1%, the absolute best you'll get from a savings account according to BankRate.com right now is $10,000 a year.
Corporate Bonds -- If you invest in the right investment-grade corporate bonds, you could net roughly 3% a year on $1 million -- generating $30,000 a year in income. Not a bad amount of money to bring in each year, if it didn't require a million-dollar investment. A portfolio of $100,000 would earn just $3,000 per year.
S&P 500 -- You could also simply buy an index fund with your million dollars. With an average dividend yield of 1.9%, you'd earn about $19,000 a year if you invested alongside the S&P 500.
The sad truth is that even with a million dollars, your options for income with "traditional" investments aren't very comforting. But there is some good news...
In the past year, I've earned $16,236 in dividends (or over $1,350 a month) on a portfolio of securities currently worth roughly $300,000 using my "Daily Paycheck" strategy. If my portfolio were worth $1 million, I'd be earning $63,000 per year. That's considerably more than you can earn from Treasuries or CDs or the broader market.
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I'm not showing you this to brag. Instead, I'm convinced that with returns from traditional income investments paying so little and a Social Security system that simply doesn't cover most people's living expenses, it's more important than ever to know about this way of investing.
The goal of my "Daily Paycheck" strategy is to collect a dividend payment for every day of the year. The beauty is that it requires little fuss.
My portfolio includes master limited partnerships (MLPs), closed-end funds, blue-chip stocks, exchange-traded bonds, and a number of other asset classes; all of which pay dividends, some even monthly rather than quarterly. Over the past year, I've earned an average yield of 6.3% on my portfolio.
You can see how much income that would mean for you depending on your portfolio size in the table below...
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Of course, there's a big difference between a portfolio of dividend payers and simply putting your money in a CD, Treasury or even a broad index fund that tracks the S&P.
I'll be the first to tell you that it's hard to match the safety of a U.S. Treasury bond if you hold it to maturity. But you might be surprised how stable a "Daily Paycheck" portfolio can be.
Let me give you one example...
You may remember the market sell-off that occurred back in August 2011. All the headlines were dour... investors around the world were anxious about a potential default by Greece... high oil prices... budget problems in the United States and elsewhere... and soaring unemployment.
The S&P 500 lost 5.7% that August... a major move for one of the world's most recognized indices.
My portfolio? Despite all the turmoil, my account fell just 1.0% during the month. That's roughly one-sixth the amount the broader market fell.
That's not to say my portfolio will always hold up as well, but I do like my odds. After all, the last time I checked, the S&P wasn't throwing off thousands of dollars in income each month, helping to smooth out returns no matter which way the market moves.
There is plenty more to share about my "Daily Paycheck" strategy... and I don't have the space to include it all here. Instead, I've put together a special presentation that outlines exactly how I find these investments that allow me to earn over $1,350 per month in income. To view this free presentation -- which includes a few high-yield picks to start your own "Daily Paycheck" portfolio -- you can visit this link.