Cash Flow Alternatives



Since the turn of the century a growing number of investors are abandoning equities and turning to cash flow alternatives, according to an investment tracking system of a major financial institution.

Investors more than ever want investments that generate a cash flow. They are moving their money into dividend-paying stocks and income trusts, and other investments that provide tangible, measurable returns on a monthly or quarterly basis.

Cash flow is the flavour of the century. It is now everyone's number one choice. Investing for cash flow is trend that is likely to continue since equity markets are expected to remain flat for the next 10 to 20 years.

Seniors would be wise to avoid high risk investments and stick to cash flow investments that answer the following questions.

· Is it delivering a reliable source of cash flow payments?
· Does it improve on cash flow payments you'd earn from money funds and GICs?
· How would changes in interest rate affect the investment?
· What is the strategy to protect your capital?
· What is its track record over 5 years?

Most important when selecting an income investment with regular cash flow payments, you should ensure it's secure, reliable, and stable.

Where do we go from here? Perhaps, we should take a look at mortgage based income investments. There are number of different ones on the market.

I want to draw your attention to a Mortgage Investment Corporation or a MIC. A MIC is a pool of investors who invest together in a variety of mortgage income investments. Collectively the pool earns 100% of net income generated from the interest earned on mortgage investments.

A MIC pays a consistent monthly or quarterly cash dividend. A MIC also meets all the requirements of a good cash flow investment, as listed above.

The rules governing the operation of a MIC are found in the Income Tax Act of Canada.

A MIC is an excellent cash flow income investment. It is also worthwhile for every senior to consider a MIC for their income retirement portfolio.

Don Bergman is President of ACIC, a mortgage investment corporation. For more information on a MIC call 1.866.772.2242 or visit www.acicinvestor.ca