When investing for income, follow these tips to ensure you stay on the straight and narrow.

Seeking Income vs. Needing Income
Investors often mistake seeking income as an investment strategy (i.e. a value strategy rather than a growth strategy, or seeking income for the purpose of diversification) with investing to fill a particular income gap in their household balance sheets. The appropriate investment strategy will depend on the results of personal due diligence. As with all investment strategies, there will be a trade-off between the level of income desired and the level of investment risk one is willing to take to achieve it.

When it comes to investing to generate regular income contributions, relying on yield-generating assets such as dividend-paying equities, bonds or funds isn’t the only option available. Investors can also gain exposure to capital growth investments, from which regular capital withdrawals can be taken as ‘income’.