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Income Investing for Beginners - a 10 Part Guide to Successful Income Investing


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The Widow's Portfolio Bursts Onto the Scene
Widow's Portfolio Income Investing

The original theory behind income investing was to create a portfolio that generated money so widows could manage to live comfortably after their husbands died. It was just a given in the 1950's and before that ladies were incapable of working.

Getty Images, Bob Ferris
These social realities meant that women, in particular, were regarded by society as helpless without a man. Up until the 1980's, you would often hear people discussing a portfolio designed for income investing as a "widow's portfolio". This was because it was a fairly routine job of officers in the trust department of community banks to take the life insurance money a widow received following her husband's death and put together a collection of stocks, bonds, and other assets, that would generate enough monthly income for her to pay the bills, keep the house, and raise the children without a breadwinner in the home. Her goal, in other words, was not to get rich, but to do everything possible to maintain a certain level of income that must be kept safe.

This whole notion seems bizarre to us. We live in a world where women are just as likely to have a career as men, and if they do, they may very well make more money. If your spouse died in the 1950's, however, you had almost no chance of replacing the full value of his income for your family. That's why income investing was such an important discipline that every trust officer, bank employee, and stock broker needed to understand. Those days are gone. After all, when was the last time you heard AT&T referred to as "a widow's stock", which could have very well been it's second name a generation or two ago.

Today, with the pension system going the way of the dinosaur and the wildly fluctuating 401(k) balances plaguing most of the nation's working class, there has been a surge of interest in income investing and how you can structure your assets to bring in passive income. In the next few pages, you'll learn the type of assets you may want to buy if you think income investing is right for you.

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