A Lifetime of Income Investing Is The Best Defense Against Job Loss


What is every employee’s worst fear? While I cannot answer that question with absolute certainty, I’d be willing to wager that a forced early retirement (be it due to layoffs or a forced termination due to poor performance) is on the short list of things that an individual likely fears. One of the appeals of income investing is that it is a measurable defense mechanism against job insecurity.

Let’s say that your annual salary is $50,000 and you manage to save $5,000 each year, or 10% of your pre-tax pay. At the time I am writing this, GlaxoSmithKline, BP, Royal Dutch Shell, and AT&T currently offer investors entry yields of 5%. That will give you $250 in annual income. With that single $5,000 investment, you have just replaced 0.5% of your total salary.

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