The majority of people think of retirement accounts when the topic of investing comes up. Most regular folks are interested in building up a nest egg by investing in a 401k or a Roth IRA. However, investing can be about more than just preparing for the distant future. Investing can actually help you right now.

When you build an income investing portfolio, you can create a reasonably stable source of passive short-term cash flow. while simultaneously building up long-term investments. There are many options when it comes to this type of investing and it can be a great way to get somewhat instant gratification.

Take a look at the following to start planning your own income portfolio.

What Is Income Investing?

Just as the name implies, an income portfolio is a collection of investments that yields regular income. This means that you receive cash on a regular basis, usually quarterly, semi-annually or annually, without needing to sell the investment.

An income portfolio is usually comprised of different investments that result in some sort of predictable payout. Some investments that you might include in an investment portfolio are:

• Dividend-Paying Stocks. Dividend stocks are those that pay out a portion of company profits at regular intervals. You dont have to sell your stock ; rather, the company issues you payments based on the number of shares you have. This dividend payment is similar to profit sharing, since you get a portion of what the company has made.
• Bonds. When you invest in bonds. you essentially lend money to an organization. Throughout the life of the bond, you earn interest. In many cases, the interest you earn is sent to you regularly. When the bonds term expires, you receive the principal back. (You can then invest in another bond if you want, and receive even more interest as income.)
• CDs. In many cases, it is possible to arrange for the interest you earn from a certificate of deposit to be paid to you on a regular basis throughout the term of the CD. A CD is also one of the safest investments for your money .

• Annuities. These are complex financial products that you should carefully consider. Some people like to include them in an income portfolio, since you receive a regular payout. If you get an immediate annuity. the payments to you begin quite quickly; otherwise, you have to wait a certain number of years to start receiving your regular income.
• Peer-to-Peer Lending/Microloans. You can also include loans made to others in your income portfolio. As your principal is paid back with interest, you receive regular income that you can spend, or that you can re-invest. Many investors keep the interest earned and reinvest the principal. Check out online peer-to-peer lending marketplaces like Lending Club or Prosper to get started.

As you can see, there are a number of options available when it comes to building an income portfolio. So, how and where do you begin?

Building Your Income Investment Portfolio

The best way to start any new investing venture is with some thorough research and number crunching. Here are three things you can do to make sure you are choosing the right path.

1. Consider the Capital

Clearly, if you want to be able to receive a significant stream of income immediately, you will need a large chunk of capital to get started. For example, the interest from a single $500 Treasury bond isnt going to allow you to buy groceries on a regular basis, much less keep you in comfort. And in the case of many immediate annuities, you will need at least $150,000.

Feeling a little out of your league? Dont try to tackle it all at once.  For most people, building an income portfolio is a project that takes some planning and time. Its about adding income investments as you go along, waiting for the cumulative effect of a burgeoning portfolio to do its job.

2. What Are the Risks?

Final Word

Have you had success with income investing? How has it affected your outlook and cash flow? Tips and experiences are welcome in the comments below.