Investment for pocket money?

[joe.a]

If one wants to invest to yield pocket money, like a few hundred a month, and has around 70k in a CD that is about to mature, what type of investments are good these days?

I'm also trying to locate those 5% checking accounts that people are talking about, but can't seem to find them and not sure how long that will even last.

If one wants to invest to yield pocket money, like a few hundred a month, and has around 70k in a CD that is about to mature, what type of investments are good these days?

I'm also trying to locate those 5% checking accounts that people are talking about, but can't seem to find them and not sure how long that will even last.

Some CDs exist where you can take out the earnings, if you wanted to go that route.

Some stocks pay monthly dividends and have higher yields, but is significantly riskier.

It depends on your term and risk tolerance, goals, etc.

[joe.a]

Thanks for the response.

If I am able to take out interest from CDs that would good but I think I need to find a 5-6% CD to yield around $300 on a monthly basis which I don't think exists.

Where can I find more info about the monthly dividend stocks you mentioned. I wouldn't want to put everything into stocks though and lose everything all of a sudden. I am also not at all knowledgeable about stock investing.

I'm reading that mutual funds are diversified and is run by professionals... is there any sort of mutual fund that could yield around $300 on a monthly basis?

The ones that I have experience with are the Canadian Royalty trusts, though I'm sure there are other monthly pay dividend stocks out there. Right now, these are yielding around 7-9% based on current dividends and share prices. Some off the top of my head are pvx, pgh, pgf, etc.

These are companies set up as trusts that own oil and gas producing properties.

The thing making me nervous about all of these Canadian trusts is that there is a tax law change in Canada which will tax these trusts instead of just taxing the dividends, which will probably lower their yield after 2011, so now might be the wrong time to get into these. I've been collecting dividends from these trusts for about 2 years and the dividends alone have yielded about 10% for me on top of the appreciation, which has been good. Oil and gas prices also will effect their profits and distributions. They cut dividends last year but even the reduced dividend is yielding the 7-9% that I mentioned.

There are a host of stout companies that are paying quarterly dividends that yield 5% or higher. AT&T comes to mind as does Verizon (if I were buying, I might buy a bit of both of these since the hottest phones seem to be exclusively one or the other). I'd consider these a bit less risky than the Canadian Royalty trusts, but more risky (obviously) than a CD, and they pay quarterly, not monthly.

You might could blend stocks and CDs to get close to your goal. If half is put into CDs and half into stocks, or somewhere thereabouts, you will have mitigated some risk and still have a good yield. Say you found a CD paying 3%, then you'd need an equal amount of stock paying yielding 8%. And of course, this is all before taxes.

[bjl584]

Maybe something like this:

CHI - Stock Quote for CALAMOS CONV OPPTY&INCM FD - CHI Stock price - real time stock quote for CALAMOS CONV OPPTY&INCM FD

The dividend is paid monthly. Of course this is higher risk and you do risk taking a loss unlike a CD. Do your homework before investing.

[ken1706]

It's getting hard to find 5% checking accounts these days. Checking accounts that pay these high rates are called reward checking accounts. Banks can pay high rates due to monthly debit card usage requirements. Also, they typically have a balance cap of $25K. Over that, the rate goes way down.

There are 100's of small banks and credit unions offering these reward checking accounts. Most are only local deals. There are a few that are available nationwide but the top rates are just around 4% apy. There are still a few paying 5%, but they are only local deals.

These reward checking accounts have been around for more than 3 years. Rates have fallen, but not as much as internet savings account rates.

[Jenny]

In case you decide to go in to stock investing it might not be a good idea to invest all what you have right now.
Just start with a comparatively small amount and then re-invest the return from it. This might reduce the risk just a little bit.