Who May Benefit? Anyone taking withdrawals or wanting to optimize their returns over time.
What Is It? Income returns come solely from dividends and interest payments. Total return includes income AND growth from capital gains and capital appreciation. Some investors believe that income investing alone protects principal over time.
Why Is This Valuable? The amount of the return is more important than the type of return. In many situations, investors can benefit from all types of return. These include: interest (income), dividends (income), capital gains (growth), and increase in share price (growth). As of 2022, income returns are generally taxed more than growth returns. Also, investments with income or growth characteristics can take turns being relatively cheap or expensive.
How Do I Do This? Be open to all types of asset classes and investment strategies. Consider all the tools available. For additional guidance, you can research total return and income investing strategies on reputable financial websites or consult with a financial professional.