Best monthly income investments that pay

What are the best monthly income investments that actually pay?

The best monthly income payers include dividend stocks, exchange-traded funds, Real Estate Investment Trust, bonds, websites, real estate, and vending machines. Each investment or business opportunity has cash flow opportunity for monthly income.

Imagine, investing in income-producing assets that pay you on a monthly basis. You have enough in investments to cover your daily life expenses.

Investing in dividend paying opportunities can help you retire early.

Luckily for you, I’m going to show you the best monthly income investments. I’ll show you what the best investment is for income and how much you need to earn $1,000 per month. With enough dedication, you can build a passive income snowball!

21-079 - Best monthly income investments that pay

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What are the best monthly income investments?

The best monthly income investments include dividend stocks, ETFs, real estate, bonds, websites, and vending machines. Each investment has the ability to pay a monthly cash payment which can be reinvested or used as income. 

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Dividend stocks

Dividend stocks our investments in companies who pay a cash payment to investors. The cash payment is known as a dividend payment. Investors need to know how to evaluate dividend paying stocks and ensure dividend safety.

For example, a company has a share price of $100. The company may pay a $0.25 quarterly dividend which means you receive $1 every year for every share.

Dividend yield is the percentage of dividend to share price. In our example, the dividend yield is 1%. For every $100 you invest, you will receive 1% or $1 back every year.

Dividend yields can range from nothing at all all the way up past 10%. However, the high dividend yield can indicate that there are issues with the company.

Dividend investors try to build a portfolio of dividend paying stocks. You might expect one investor to have an average dividend yield of 6% for their entire portfolio. Therefore, for every $100,000 invested, they earn $6,000 every year in income. 

Dividend exchange traded funds

Picking individual dividend stocks can be considered risky. You never know when a company will decide to cut its dividend. Therefore, you can help minimize your risk by purchasing exchange-traded dividend-paying funds.

Exchange-traded funds are a collection of stocks bundled up for one low price.  Therefore, your risk is spread across hundreds of stocks and not just one. Some exchange traded funds like VYM focus on dividends for income investors.

Covered call ETFs

Covered call exchange-traded funds are a very new asset class. The goal of a covered call ETF is to provide investors income through stock options that are managed by a fund manager. The price of covered call ETF are less volatile, but you receive a higher yield.

For example, most covered call exchange-traded funds have a yield between 8-12%.Therefore, you need substantially less money to live off dividends with a covered call ETF.

For every $100,000 invested, you are earning between $8,000 and $12,000. Someone wanting to live on $40,000 per year would only need $400,000 invested at 10% yield. 

The major downside to covered call exchange-traded funds is the growth opportunity. You don’t see a whole lot of price appreciation because you are obtaining higher yields.

As an example, you can either invest in S&P 500 or a S&P 500 covered call ETF. The S&P 500 covered call ETF might yield you 10% return on investment. However, the S&P 500 index had a great year and returned 28%.

Because you’re invested in a covered call ETF, you only got 10% ROI and missed out on an extra 18%.

Some covered call ETF invest in a 50/50 split. In other words, call options are done on 50% of your investment and the other 50% in the underlying index. Therefore, you get a balance of growth and income.

Real Estate Investment Trusts

Real estate investment trusts (REITs) are exactly like dividend paying stocks. The only real difference is that you are investing in companies who focus on real estate. Real estate investment trusts are required to pay out 90% of their income back to shareholders.

You can also find real estate investment trust exchange-traded funds. For example, VNQ is a collection of real estate investment trusts. Therefore, you have access to hundreds of real estate companies for one low cost.


Bonds are another option for investors looking to reduce volatility of their portfolio. The yield is relatively low compared to other assets like dividend paying stocks. However, low volatility makes them the ideal investment for retirees.

Some investors may invest a portion of their portfolio in bonds. Doing so gives the perfect opportunity to hedge your portfolio in the event of a stock market crash. Investors can then sell their bonds and purchase discounted dividend paying stocks.

For example, maybe you have a portfolio split of 70/30 where 70% of your investments are in stocks and the other 30% in bonds. The stock market crashes, leaving some of your favorite companies at a 30% or more discount.

Prior to a stock market crash, your favorite companies may have been paying a 6% dividend yield. During the crash, they’re now paying a 9% yield because the share price is low. 

Your bond prices were unaffected by the stock market crash. Selling your bonds, you can now purchase high yield stocks at extremely good prices.

When the stock market recovers, you can keep your stocks or sell some to purchase bonds again.


Websites are a lesser-known investment opportunity. You can purchase a blog or website for 32-42 times it’s monthly income. However, you need specific knowledge in understanding how websites are built and purchased.

For example, you can purchase a blog that earns $1,000 per month for only $32,000. You are earning $12,000 per year and it only costs you $32,000. 

Websites can be extremely cheap. As you can see, you are learning a 37.5% return on investment for purchasing one website.

Physical Real Estate

Physical real estate has made many people millionaires. The best part about real estate is that you can use someone else’s money to make you rich. Not only can you  borrow money from the bank to purchase the house, but renters pay off your mortgage for you.

When done right, real estate will pay you a monthly cash-flow. Your tenants should be able to pay for your mortgage and have money left over to invest.

Additionally, the home values should appreciate over time. Eventually, you can sell the house for profit and you never had to pay anything out of pocket.

Real estate carries substantial risk.You never know when you’ll have bad tenants which can destroy your investment. Real estate can also be a lot of work if you’re not willing to hire out a property management company.

Vending machines

Vending machines have a good income potential, but it’s not 100% passive. Your job is to find vending machine locations and keep the vending machine stocked. 

Each vending machine should be able to make you between $50-$150 per month in profit. Averaging $100 per machine, you would need 30 machines to make $3,000 per month in passive income.

Most vending machine suppliers are willing to help finance your vending machine purchase. In other words, you can get the vending machines up front and then pay off the machines with your profits.

What is the best investment for income?

The best income investments are the ones you understand and are safe. You’ll never make any money as an income investor if you don’t understand the investment. The first rule of investing is to never lose money.

Don’t invest in real estate if you’re not willing to put in the work to understand real estate. You don’t want to purchase an expensive property and then realize you’re running at a loss.

The same can be said for websites. You don’t want to purchase a website and then realize you didn’t properly vet the website. How would you feel if you spent $32,000 and purchased a lemon?

The best investors understand the investment. You know how you’re going to make your money and the potential risks. 

How much do I need to invest to get $1,000 a month?

Most income investors can expect to get a 6% yield on investment. Therefore, you need $200,000 invested at 6% ROI to make $1,000 per month.You need even less money if you are able to find an investment with a higher yield. 

Remember, not all investments are equal. Typically, the more work you put into an investment, the higher income opportunity is available.

Purchasing dividend stocks is easy. You’ll only get around a 6% dividend yield because buying dividend stocks is extremely easy. However, creating your own website is more difficult and can result in higher yields.

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Summary: Best monthly income investments that pay

 As you can see, there are plenty of monthly income investments that actually pay. The best monthly income payers include dividend stocks, exchange-traded funds, Real Estate Investment Trust, bonds, websites, real estate, and vending machines. Each investment or business opportunity has cash flow opportunity for monthly income.

The best opportunity for income are the investments you understand. Always take the time to learn about a new investment opportunity before you invest. You should always do your due diligence to understand the risk involved.

You should expect to have $200,000 invested in order to make $1,000 per month. $200k assumes a 6% dividend yield. Therefore, you can invest less money if you have a higher-yield investment.

John is the founder of TightFist Finance and an expert in the field of personal finance. John has studied personal finance for over 10 years and has used his knowledge to pay down debt, grow his investment portfolio, and launch a financial based business. He is committed to sharing content related to personal finance based on his experience in his career, investing, and path towards reaching financial independence.