A lot of people rely on investment income to fund their life.
It could be retirees who have worked hard and now want to enjoy the fruits of their labour. It could be someone who was injured and received a large payout. It could be a lucky person who inherited a lot of money. It could a regular person who's building wealth and wants an income stream.
You won't get decent income from bank accounts or bonds these days. The best place to find good income is the share market. Here are two dividend ideas:
WAM Capital Limited (ASX: WAM)
This is the flagship listed investment company (LIC) run by Wilson Asset Management. It has been operating since 1999 and since then its portfolio has generated an average return per annum of 17.5% before fees and taxes.
It uses that return to pay a steadily growing dividend which has been increased every year since the GFC. I really like the philosophy of sticking to investing in undervalued small and mid-cap growth shares if there's a catalyst, otherwise WAM Capital will stick to cash.
It currently offers a trailing grossed-up dividend yield of 8.9%.
National Storage REIT (ASX: NSR)
National Storage is the largest self-storage business in Australia and New Zealand.
Over the long-term I believe property businesses that own buildings with little improved land value have an advantage over office buildings and shopping malls. The value of land goes up, but buildings depreciate over time – they require significant maintenance.
The price of property in Australia remains high, so National Storage is able to charge an attractive price for its properties.
It currently offers a trailing distribution yield of 5.6%.
Foolish takeaway
With interest rates currently rising I'm more drawn to the idea of WAM Capital because I think the investment team have the skill and strategy to navigate the market volatility. National Storage may offer a more appealing yield in a year or two.
