Alternative Investments for Cash Flow for Retirment and Second ...

Alternative investments in farmland, metals, commodities can provide cash flow

One of the challenges with alternative investments is that they are often not in the main flow of digitally controlled investments. Stocks on the NYSE or DOW, S&P500, or NASDAQ can all be sold almost instantly, and dividends ? if being paid ? can be routed to us through the complex stock market networks.

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Alternative investments can be a challenge in the dividend and cash flow segment of investing. Gold, silver, platinum or diamonds ? all stellar alternative investments, pay no dividends and do not provide cash flow. They simply maintain our wealth with a minimum of fuss. Sometimes though, we need the cash flow.

Alternative Investments are Ideal for Retirement

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Retirement is best enjoyed by a steady stream of dividend checks or cash flow distributions with the principle investment remaining untouched. Alternative investments ? whether in the precious metals, farmland, foreign stocks, commodity segments, partnerships or energy trusts ? can contribute mightily to our retirement cash flow. Structuring the investments correctly for cash flow is the key.

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Taking some of the popular alternative investments one at a time, we can see a few of the strategies that will convert stationary wealth into cash flow producing retirement income, or second incomes for those that want their resources working for them.

3 Ways to Create Cash Flow from Alternative Investments for Retirement or a Second Income

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1. Gold and silver, if sufficient quantities are held, can be used for backing options or futures. We can sell either Call or Put options for our silver or gold ? under the direction of trusted and skillful commodities broker ? to generate cash flow fairly regularly. There is risk of being taken to the cleaners somewhat if you play with futures, but much less so on options. This is what Warren Buffet practiced successfully for some time before his mother-load of roughly 130 mil oz. of silver was snatched from him.
2. Lease farmland for grazing or for farming. This allows land that could be producing, to go into cultivation with monthly payments flowing from the particular use. Cattle grazing is low paying, while corn, soy beans, and high value crops can offer significant payments. When our food prices increase, the payments received for subleasing out farmland can become significant all the while enjoying the price increase in the value of the land.
3. Commodity trusts such as mining trusts, or energy trusts for profit and royalty payments. While natural gas trusts from Canada have somewhat gone bust, oil trusts, and mining companies are beginning to pay significant dividends and growing them. Precious metals have taken a downturn now, but the average cost of metals out of the ground is still well below the current prices to mine for several large operators and a few smaller ones. These companies realize they need to pay dividends to capture the investing dollars of bigger funds, as well as the retirement segment of the population. Freeport McMoran (FCX) and BHP Billiton (BHP) both yield 1.5% while offering potentially significant capital growth. The oil trusts can pay more than 5% so they would be the first place to look.

Alternative investments provide a balance to the overall stock market. With the upward momentum in place for a solid performance of all the major indices, prudence and financial survival, suggests that balancing our portfolio with cash flowing stocks will provide ballast.

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As the markets climb, there will be increased volatility. Volatility can wreak havoc with our net worth, while dividends can smooth the waves out. For this reason, alternative investments ? in a wide range of segments, makes the best use of our funds for growth, cash flow, and wealth preservation.

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About Mark S

Former commodity trader, adviser, love root beer, still miss my favorite dog.

Source: http://www.financialsurvivalcenter.com/alternative-investments-for-cash-flow-in-retirement-or-for-second-income/

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