A sit-down with Neil George to find out where income investors can look for big yield in today’s market
If you’re like many income investors, you’ve been eyeing falling rates with growing unease.
After years of income-starvation after the Fed took rates to near zero in the wake of the financial crisis, income investors were finally seeing a little bump in yield over the last year or so.
The idea behind the book is simple — rates are dropping … finding safe-but-high yield is growing harder and harder … where should income investors turn?
That’s where Neil comes in, with 65 different income plays. There are investment ideas, as well as unique “side hustle” opportunities — it’s literally dozens of little-known financial secrets to living a richer, more fulfilling life.
Now, being a little suspicious of “big yield” in today’s market, I pressed Neil on this. How big? And as importantly, how much risk is needed to get those yields? Here’s what he said:
There are many securities which I outline that offer yields that are multiples greater than that of the S&P 500 and the general U.S. bond market — all with minimal risk from proven companies’ stocks, bonds, preferred shares ETFs, closed-end funds, and other funds.
All of these are buy-and-own — with no need to trade anything or deal with options strategies. And yes, I have plenty of yields running from 7%, 8%, 9% and over 10% — all vetted and proven in their capability to deliver income for any individual investor.
That reply got me curious. So, to get a better idea of the book and the opportunities in it, I recently interviewed Neil. He was kind enough to provide tons of details.
So, in today’s Digest, let’s dig into this Q&A and find out where to look for great income ideas, even as rates keep heading lower.
***Where to find big, safe yields in today’s market
Jeff: Neil, thanks for joining me. To begin, what was your motivation for writing this book?
Neil: I continue to see that the individual investor gets the short shrift from Wall Street. Increasingly, from financial services companies, to brokerages, to asset managers, they want to deal less and less with individuals unless they are of immense wealth. Even those with millions in net worth aren’t viewed as important enough by more and more firms.
Instead, firms are trying to shoe-horn individuals into indexed and automated accounts — even to the point of using robotic managers to avoid personal and direct service. This often doesn’t serve the needs and wants of investors.
The book is all about providing a playbook for the individual investor to generate or bolster higher income. I have provided how-to and step-by-step instructions on numerous investments and strategies. And I have provided working examples for each of the investment strategies.
The goal is to empower anyone to make more from their portfolio just as they may be left behind from Wall Street firms. And it also provides numerous means to generate additional income outside the markets. There are countless ways to generate income beyond regular paychecks. And I present a wide variety of ideas and the steps needed to make them pay and pay well — all while doing many things that folks are interested in already.
So, at the end of reading the book, anyone will have many, many ideas that they can put to work on day one to make more income. And it will also be a great handbook that readers can turn to on any given day for reference in the years to come.
Jeff: How many of the strategies in your book have you used personally?
Neil: Each and every one of the investments I cover in the book I have deployed in my more than thirty years of professional investing, for myself, family and my clients and firms. So, I wrote the chapters from experience of what works, what doesn’t, and what can and will go wrong and how to avoid it.
I have spent all of these years honing my understanding of the financial markets. And I have made mistakes and have learned from them. The book shows you how I make more income the right way with less risk. Because, as the adage goes, I eat my own cooking.
For the non-investment ideas and activities, I have done several of them — often not specifically for the income, but because I enjoy the activities. And now I can share how they work for anyone.
Jeff: To help contextualize why an income book might be necessary at all, can you explain how much more challenging this environment is for income investors compared to yesteryear?
Neil: Basic yields for dividends and bonds are very low. The S&P 500 Index yields a mere 1.90% which is barely above core inflation as measured by the core Personal Consumption Expenditure Index (PCE) at 1.58%. This is down significantly from the average yield for the Index back in March of 2009 when it was briefly at 3.60%. And it has been falling steadily over the past thirty years, from highs back in the 1980s of yields in the 6.00% range.
And for bonds, yields are down significantly in just the past decade with the general 10-year U.S. Treasury yields falling from near 4.00% to a current level of 1.78%.
This means that investors can’t just rely on the general stock and bond markets for income. Instead, they need to focus more on specific sectors of the stock and bond markets and find opportunities in individual investments for reasonable yields.
But they are there. And I continue to find not just reasonable but high yields. I’m talking high-quality stocks, individual bonds, and bond-like investments. And at the same time, many to most of what I end up finding have little coverage in the financial media. It’s like too many in the markets are asleep and miss out on great yield opportunities.
Jeff: What’s your favorite overall market strategy in the book?
Neil: I have always loved the bond markets. Bonds are much more diverse than stocks. From U.S. domestic bonds ranging from Treasuries to corporates as well as mortgages and municipals, there is always an underpriced bond generating more income with price appreciation potential that’s being missed by the markets.
And unlike many larger stocks which have countless analysts looking at the same numbers — most bonds do not have the same coverage. This means that I can find bonds that are not getting the attention that they deserve. This means that I can find bonds with more income, and in some cases, a lot more income than the general generic bond market.
And I have a collection of explanations and how-to instructions as well as examples that the readers can use right now to make more income.
Jeff: And what about the non-market income ideas? Are you willing to share your favorite one of those?
Neil: I am very intrigued by the sharing economy — the idea that you can take an idle asset that earns nothing and costs you daily in expenses and turn it into income with little to no risk. It doesn’t take licenses, mostly doesn’t take permits and it can be done immediately to generate income. And the best part is that you don’t need to go out and buy anything to get started. Inside the book, I go through a collection of these strategies complete with what to do, how to do it, and how to make sure that it works.
Jeff: If you had to pick just one income strategy for, say, your grandmother, what would it be and why?
Neil: For the past ten years, one of the best go-to market vehicles for income and sustained and proven growth has been real estate investment trusts (REITs). And while there are many kinds of properties inside the REIT market, the overall U.S. REIT market as tracked by the Bloomberg U.S. REIT Index has delivered 113.80% in income for each dollar invested over the past trailing ten years, while also providing capital appreciation of 129.68%. This combined equals an average annual equivalent return of 13.21%.
That’s a big proof element that real estate does pay and pay well particularly in low to ultra-low interest rate markets. Quality, well-run REITs generate ample income and gradual underlying property price appreciation that works well for all investors including family members who will call you out if something goes wrong.
And I would also add as an alternative — a good quality U.S.-focused bond fund — preferably a closed-end fund. Many can be found at big discounts to their net asset values (NAV) which means that you can buy them for less than the bonds inside the fund. And whether focused on corporations or municipal bonds, these markets are where your loved one can both eat well and sleep well as the saying goes. And you’ll be able to sleep well knowing that they are invested safely with good income.
Jeff: What’s the most unique strategy you’re proud of in your book?
Neil: I think that one of the unique strategies comes from the non-investment side. Specifically, there are some examples of earning income from hobbies and activities that many readers either already enjoy doing or would be very interested in trying — just for fun and relaxation.
But by showing you exactly how to make income from some hobbies or relating activities is perhaps the best way to get paid income from what you enjoy doing on any given day.
Jeff: Is there anything you’d like to say directly to our readers who are considering picking up a copy?
Neil: I think that I’d like people to know that this book was written for everyone interested in more income. And I mean everyone. It doesn’t matter if they are young or old, wealthy or just starting out — or even recovering from an economic set-back — I have proven and worked-through ideas on how to make more income which anyone can use.
Also, the ideas work — as I’ve been using them for decades for myself, my family, my clients and my firms.
Last, thanks in large part to my great editorial team, the book is engaging and entertaining. In other words, not only is it informative, it’s a great read — not just a dull handbook.
Jeff: Thanks Neil.
I’ve had the opportunity to check out Neil’s book and I can vouch that it’s a fun, informative read with tons of actionable ideas. To learn more about how to get your copy today, click here.
