Here's a big downside to investing in equities: Your gains come later, not sooner.

I’m happy with my retirement portfolio, but I won’t see any income from it for decades -- and I’ll have to sell my investments in order to make it work.

That’s why I’ve started investing some of my money in income assets, so I can put my money to work for me right now.

Here are five investments that will get your money to work immediately...:

1. Dividend Stocks

Dividend-paying stocks are the classic income investments. You receive a portion of a company’s profits just for being a shareholder. At regular intervals, you receive a payout based on the number of shares that you hold. You can begin receiving dividends almost immediately, as long as you buy within a certain time period.

Start with dividend income funds or dividend aristocrats, and build up your portfolio. It’s also possible to find some great foreign stocks that offer competitive yields. Your income will rise as you build your portfolio.

2. Bonds

Another classic addition to any income portfolio is bonds. While you won’t receive your principal back until the bond matures, you receive interest payments regularly. With the right strategy, bonds can provide you with a solid income right now. Bond funds allow you access to a diversity of choices, and if you want to increase your potential yield, you can look into municipal bonds (they come with tax benefits) or emerging market bonds.

3. REITs

Invest in real estate without a huge capital outlay, and receive income as well. The structure of REITs means that 90% of profits have to go to dividend payments. If you want exposure to real estate in your income portfolio, REITs can be the way to go. As with many other income investments, it’s possible to purchase REITs as part of ETFs and you can geographically diversify your holdings with foreign REITs.

4. Master Limited Partnerships (MLPs)

Many investors aren’t aware of the income-producing nature of these investments. With MLPs, the yield is often 6% or higher. Additionally, you can enjoy increasing payouts -- assuming these partnerships do well.

MLPs are especially prevalent in the energy sector, where you are likely to find them associated with pipeline projects. While there is great potential with MLPs, there is also a great deal of volatility associated with them.

5. Preferred Shares

If you want income that is a little more regular, preferred shares can be the way to go. A preferred share is a hybrid: It’s not a common stock, and it’s not a bond. It represents a sort of quasi-debt. Preferred shares pay out regular dividends, and yields can be 6% or more. It’s considered a fixed-income payment, though, so you don’t get the advantage of rising rates if things start improving.

Many companies that offer preferred shares are in the financial sector, so you need to feel confident about those companies before you buy.

The Investing Answer: Investment doesn’t have to just be about capital appreciation over a period of decades. It’s possible to start making money right now when you invest in income-producing assets. Look for a broker who can help you diversify your income portfolio by offering a mix of income investments that suit your risk tolerance. Create a plan that mixes long-term capital appreciation with income right now, and you’ll have the recipe for long-term financial success.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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