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How to Generate a Monthly Income Forever

Updated on :  

08 min read.

Money invested in various financial schemes is done with the purpose of generating returns that compliment the investments thus made. It is advisable to obtain a thorough knowledge of these schemes before investing in them. The salaried people do so to ensure a greater return on their investment made from their hard-earned money. It not only guarantees their income generates further income but also makes them financially secure for the future.


Upon retirement, it is difficult to have a monthly source of income whereby one can continue to receive income month after month. It, therefore, would benefit an individual immensely if he/she can make some smart investments in some of the schemes that guarantee regular income even after retirement. This would help generate good returns throughout life and serve well to benefit the investor financially even after retirement.

The significance of Monthly Income-Generating Schemes

It is imperative to understand the benefits that are associated with the different kinds of investment schemes as different schemes are designed keeping in mind the needs and requirements of different investor-types. As for individuals who are employed and earn a regular monthly salary, the key would be to invest in schemes that focus on capital appreciation and growth strategy. But one would also want to invest in schemes that provide with monthly returns in order to meet their immediate financial requirements post-retirement.

The portfolio of investment for income generation is quite different from the one that focuses on capital appreciation. The income generating schemes may not be quite popular among a vast majority of the investors as they tend to generate not so high returns,  but they sure guarantee a stable income for the future. The passive income generation of these schemes lead to financial independence and therein lies its prime significance.

Approach to Generating Monthly Income

Monthly income generation

Before investing in such income-generating schemes one must clearly chalk out the financial priorities and stick to a clearly drawn plan to benefit out of these schemes. Following approach can give a head-start on investing in such schemes.

Setting goals for your Financial needs

As with retired individuals, income generating schemes is of great significance as this will keep them financially up and moving since they can no more depend on the income they once had. In the case of salaried individuals, they can reduce their dependency on one source of income and invest in income-generating schemes. The asset size of the schemes invested in determining the size of income that will be generated through it. With greater asset size one can expect greater monthly returns.

Investments made in time will always come handy whenever the need arises. Individuals nearing retirement can start investing in these schemes in time to benefit after retirement. The salaried individuals must take into account the unpredictability of their job scenarios and consider it a precautionary measure and a wise one to invest in these schemes in case of uncertain and unfortunate events (job-change, layoffs etc).

Definite approach to Investing

One must know that income-generating schemes tend to benefit depending on the size of assets one accumulates over the time. So larger the asset, larger the income. If the idea is capital appreciation through investment schemes, it may not qualify to provide for monthly returns as in this case. The monthly income-generating schemes may not be high yielding but they sure have a greater value in time of need.

Choice of investment schemes portfolio

This is extremely important to ensure the return on the investment made in these schemes as the more number of assets held will give greater returns. So, one must do thorough research before choosing the schemes and investing in assets one wishes to hold as these assets will become his source of income. Income generating schemes go by the principle of the volume than by the rule of margin.

In other words, more volume of assets acquired will ensure higher returns as opposed to lesser assets with higher margins as the yield from these schemes is not high. The average annual return on such schemes is around 8 percent.

Consider Financial Independence as a Motive

When one chooses to invest in income-generating schemes the primary goal should be financial independence. As with retired individuals who may solely depend on such schemes, the salaried individuals should make it a habit to attain financial independence by not entirely depending on their salaries to ensure financial security and meeting immediate needs.

Monthly Income Generating Investment Options

Mutual Funds with Monthly Income Plans (MIP’s)

The mutual funds invest mostly in debt instruments and the interest accumulated is distributed among investors on a periodic basis. The dividend distributed to the investors can be declared only from the profits of the MIP. MIP’s tend to be less risky than equity-linked funds.

Savings Account that pays high Interest

This guarantees freedom to access of funds and the individuals can liquidate their assets at will which is not the case when investing in debt-funds. These savings account function almost like the Fixed Deposits and offer various benefits to the customers.

Stocks that pay Dividends

The objective here should be to invest in stocks that pay regular dividends over a period of time. One must look for stocks that have paid consistent dividends in the past. The dividend yield of around 3 percent is a good bargain and some increased earnings per share (EPS) is indicative of a good performance of the stocks.

Bank Fixed Deposits

Fixed Deposits ensure interest returns of around 8 percent and are an ideal income-generating idea for retired individuals. It does not allow liquidity benefit at will and attracts penalty on premature withdrawal. The interest earned is taxable. The interests are paid monthly, and this is a virtually risk-free option of putting one’s money into.

Real Estate Property

This is one of the best forms of investment to ensure a long-term income and the appreciation value is quite high that may even beat inflation. It may not be possible for every individual to consider investing in a considerable sum of money in real estate to generate income, but options like Real Estate Investment Trust (REIT) Funds are some ways in which small investments can be made to ensure income generation.

Monthly Income Schemes of Post Offices in India

Post Office Monthly Income Scheme (POMIS) is one of the best-guaranteed plans to consider if looking for income-generating investments investments. The returns are guaranteed, and interest earned stands at 6.6% p.a.


The idea that different individuals have different needs when it comes to finances and investment-making capacity one must agree that everyone would like to ensure a constant income-generating option no matter what the situation be. It is imperative to choose from the various investment options after considering one’s position and expectations to benefit from the schemes so as to obtain continued income whether employed or retired.

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