The Layman's Guide to a Growing Income Stream for Life

By Kevin Rust

In the low-interest rate environment we currently find ourselves in these days, just putting your hard-earned dollars into a simple savings account at your local bank just wont cut it anymore, if it ever did. The time has come to broaden our horizons a bit and consider ways we have to grow our savings and have our nest egg work for us.
The plan is to explore our options and construct an investment strategy that is tailor-made for each individuals situation and tolerance. A plan that will provide us with a growing income stream that will allow us to provide for ourselves and our loved ones for life while allowing us to rest easy at night.
This book is a blueprint outlining the good and the not-so-good options we all have in an easy-to-understand reference guide you can turn to anytime. We all should have a work ethic in our profession. A good days work for a good days pay. Inside, we expand on that ethic. The pay earned for a good days work will now work for me.

• Language: English
• Publisher: Xlibris US
• Release date: Feb 27, 2015
• ISBN: 9781503541214

Kevin Rust

After twenty years providing services for a global leader in transportation and logistics, Kevin has since retired to Charleston, South Carolina. He has gained intimate knowledge of how international companies excel in their fields, as well as what decisions may lead to their shortcomings. Now settled in the Atlanta area, Kevin works periodically in advising other professionals, managing and constructing their investment portfolios. Tailor-made to each individual, he has enjoyed success in this endeavor and has sought to reach a greater audience with this first book.

Book preview

THE LAYMAN’S

GUIDE TO A

GROWING INCOME

STREAM FOR LIFE

Kevin Rust

Copyright © 2015 by Kevin Rust.

Library of Congress Control Number:   2015901833

ISBN:   Hardcover   978-1-5035-4119-1

Softcover   978-1-5035-4120-7

eBook   978-1-5035-4121-4

All rights reserved. No part of this book may be reproduced or transmitted

in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system,

without permission in writing from the copyright owner.

Any people depicted in stock imagery provided by Thinkstock are models,

and such images are being used for illustrative purposes only.

Certain stock imagery © Thinkstock.

Rev. date: 04/02/2015

Xlibris

1-888-795-4274

www.Xlibris.com

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Contents

I The Variables

II The Core

III ETFs

IV CEFs

V Preferred Stocks

VI Individual Stocks

VII REITs

VIII MLPs

IX Bonds

X Bringing It All Together

XI Portfolio Hints

XII Final Thoughts from Your Author

XIII Lists

XIV Glossary

Acknowledgement

All references made to Morningstar.com have been approved and used for informative purposes only.

A Rocking Chair Collaboration

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This book could not have been made possible without the contributions of others.

I first pay homage to my late parents for their teachings, wisdom, and compassion to the plights of others.

My publisher and their very talented staff for their confidence and commitment to this text’s content.

Most of all, I want to extend my undying appreciation and gratitude to a person who has been an inspiration and motivation for writing this book. Without her help, her love, and her continued support, this book could not have been made possible.

*Investor Notes*

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*Investor Notes*

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Introduction

"The wise old owl, sat in his oak

The more he heard, the less he spoke

The less he spoke, the more he heard

Why can’t we all be, like this wise old bird?"

I own a rocking chair. It may not be the prettiest or most aesthetic of rocking chairs, but it suits me well. Every so often, I revisit my old friend to reflect on what has been accomplished and what can still be accomplished in my life. Throughout my poor chair’s life with me, I still make the time to repair and restore it to its original state as best I can. It has always proven to be sturdy and dependable. The reason I bring this to your attention is I feel, in many ways, that it is analogous to my income portfolio and to the one we hope to build for yourself. Like my chair, my income portfolio may not be the hottest, trendiest one around, but it serves me very well. I revisit it periodically, repair and restore it when needed, and it has proven to be a very useful and indispensable asset in my life.

As for the title of this work, the term layman doesn’t necessarily mean you have to be laboring in the coal mines of West Virginia six days a week, although you certainly could be. Technically, the term layman, as defined in Webster’s abridged dictionary, is one of the people as distinguished from the clergy; one not of a stated profession. For our purposes, I use the term generically for those who are not so familiar or comfortable in the world of income investing.

Yours truly, the author of this book, was a package delivery driver for UPS for almost twenty years. Upstate New York, and I mean, really Upstate New York, was not an easy place to work, save, live, or prosper by any means. So finally, my decision was made to prosper elsewhere. But how? I had always been investing regularly through a 401K but never really had the inclination, proper knowledge, nor time to give my financial situation serious consideration, until upon leaving a steady paycheck and really researching what I had and what I lacked. The realization was amazing!

I distinctly remember an old-timer whom I worked with … a very nice guy and always smiling even knowing what a difficult task he was faced with for the day. He never minced words, and I always respected his straightforward approach to any given situation. One morning, I approached him as I was mulling over my options, and I asked, John, how do you do it? We have a rough day ahead of us, and you are happy as can be.

His response has stuck with me ever since. Boy, always be professional, do your job proudly, and respect and love those whom you hold close. Be smart when it comes to money. It isn’t everything in this world, but it sure makes it a lot easier. I gave him my coffee and shook his hand. He went and did his job that day, as he always had, and I had a new outlook while doing mine. I gave my notice a few days later. It was then I decided that it was time to get into the nuts and bolts of investing.

Perhaps we have all wondered to ourselves, looking out our window at the Jones’s place, how is it he has a brand new Audi A-5 in his driveway, and I am more like Al Bundy, pushing my ’72 Dodge along the interstate while strangers throw soda cans and french fries at me; how does he have a nice Breitling watch, and my watch has the Hamburglar on it; how does he do it, and what makes him so special; what does he know that I don’t?

The ultimate goal of this book is to enlighten us regular folks that it really is possible to construct a growing and increasing income machine for life without worrying about coworkers, bosses, deadlines, and innumerable pressures of financial concern and to just enjoy our lives and our families. A daunting task, I’ll agree. But it can be done! I am proceeding on the premise that this is a whole new ball game for many. We live in a low-interest-rate environment these days, so the challenge for us income-starved investors is to construct a portfolio that we can have confidence in while meeting our income goals as well.

Well, I am here to help. You might ask, where to start? What to do? Where to look? I certainly will try and bring to your attention the avenues that might work for you and those that may not. Everyone’s situation is different, and this text is meant to make you aware of information that is admittedly available but very time-consuming to hunt down, evaluate, and consolidate into a working and efficient income portfolio. I hope to make this easier.

You have made the decision to purchase this book, and that tells me you have the desire to learn, so let’s try and use that motivation wisely. Make notes in the margins; some choose to highlight phrases or fund symbols worth further investigation, whatever works best for you. This writing can be used as a guide or reference resource for whenever you may need it. Sure, some of the specific information will change over the years as is expected, but the basic premise of your allocation of investments and the reasoning behind your choices should serve you very well for the rest of your days.

There are many aspects of financial responsibility: debts, taxes, living wills, health proxies, etc. The list goes on and on. There are many competent and helpful people out there for those specific concerns. This book will concern itself with just one area: to augment your current income with a portfolio that generates a steady, reliable, and increasing income stream with realistic costs and a risk/reward combination that allows you to rest easy at night. Income-generation and sustainability is just one piece of the puzzle, a pretty big one all things considered. The beauty of life is opportunity and choice. To have the resources to make informed and educated financial decisions with confidence without paying an arm and a leg in inflated fees is crucial in order to meet your income objectives.

I am not advocating that every dollar you have saved should be dedicated to just income-generation. There are other strategies to fund your financial needs and obligations. Growth is essential in any portfolio, and there are many funds that strive to achieve just that. You can break off pieces of that portion of your assets as well, but there are other books that specialize in that area. My