The basic idea behind income investing is that you only spend the income from your investments. Seems like a great idea, right? It’s easy to know when you have enough to retire—when the income from your investments replaces the income from your job.
The first problem is that many income investors do not realize that a high yield does not necessarily equal a high return. You want cash flow? I can give you 10% cash flow. Give me $100, and I’ll give you $10 a year for the next 10 years.