Where to invest for income

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I can't afford much risk. Is there anything better than what I have now?

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There is no free lunch.

Depending on your risk tolerance, you might consider putting some of the cash in blue chip stocks that have a history of increasing dividends. However, even the best stocks go up and down 30-50% in a 3 year period.

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I have $475,000 in a 5 year CD with 4 years to maturity. It earns 2.25% annually. The penalty for early withdrawal is 2 quarters of interest. I would like to have more income off of this amount of money. I have been waiting for interest rates on tax free municipal bonds to go up but it looks like that might not happen anytime soon. What do you smart investors suggest? I can't afford much risk. Is there anything better than what I have now?

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Or if you don't have to touch the principle for awhile, look at some solid dividend paying stocks.
Just depends. Can get income from rental properties, but may be some expenses to be incurred if you can't do routine maintenance yourself. Not to mention pain in arse. If you don't overpay for the properties, you get to depreciate them even if they gain value with time. Not hard to beat 2.25% especially after you pay income tax on it. Could look at tax free muni's and compare your after tax return against what you'd get.

Investing in CD's for the long term is a lot like going too slow in the fast lane, it's just as risky.

The biggest question we need to know is do you need to principle amount ($475000) for anything?

SDIV

Too old (81) to manage real property. Too old to try to recover from risky investment losses - not enough time left. I don't trust CFP's. We (my wife and I) have a recently widowed friend who told me she was being charged $500.00 per month in management fees by her CFP.

Our CD is in both names in JROS so we have full $500K FDIC protection. We absolutely have to invest in something that has as little risk as possible.

So, considering the volatility of stocks currently,
would stocks from financially strong companies that have dividend yields greater than 2.25% be a viable option?

I appreciate serious responses because we really could use more income. We are savers, not spenders, so the current fiscal policy of the Federal Reserve of holding interest rates down to benefit spenders really ticks me off.

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oo old (81) to manage real property.

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you don't have to manage. I said this above.

Personally, at your age, I would stay away from putting too much into equities at this point, just to capture a dividend. I mean, you said you were looking to avoid risk/loss of capital. And while that means different things to different people (the relative risk level, I mean), maybe debt is something that would fit the bill better for you. MAYBE.

I'll toss an idea out that I'm looking at for yield/income. I'm looking at senior, medium term debt (bonds) on larger cap oil companies that have reasonably healthy balance sheets - but they've been beaten down in price. I don't know where the economy, interest rates, the stock market or the price of oil are going to be over the medium term. But I do know that firms will pay their interest obligations on senior debt before they'll pay dividends, if it comes down to that. Even if rates go up and the price of the bonds continues to fall, that's no different than the real value of your CDs being lower if rates rise, if you could sell them before maturity. But by staying with bonds that I'll hold to maturity (just like your CDs), I'll get the face value at maturity. If I pay less than face value now, then all the better.

The trick is to choose carefully (I don't want any speculative dogs that are already gasping for air) and I'm enlisting an adviser to help with this. I'm not going to plow all of my cash into this strategy, but I'll probably put 15-20% of my cash toward this. Then when I'm paid off in 4 or 5 years, I'll see what the landscape looks like then.

BTW, I'm also a great believer in real estate as a great creator of wealth and income. It's been the single best investment vehicle over the course of my life. But I fully understand your point. Most of my properties are several hours away from where I live now and they're all under management. But even then, there have been times when I've had to step in to address management issues. In the worst case, several apartments (that I never had a problem renting) kept getting reported as vacant. I found out that the manager, who I'd known for years and trusted, was skimming the money. I was in my 30's back then and at 6'3", still looked like I ate steroids for breakfast. After a surprise visit, that involved me taking two days off from work and making a longish drive, I told the manager about the corrective actions that I was considering, ranging from legal action and going after his license to "other things"... he decided to write me a rather large check and sign off on a contract cancellation. I didn't file legal action but I did have to hire a new manager... who got to hear how the last character was dealt with. She did OK, but I've had two more managers since her (people retire, move, die, etc.). Would I be in the mood to drive three hours and try to pull the Don Vito Corleone tough guy routine now? No. Would I want to do it at 80? Hell no! It wouldn't work anyway. So maybe the risk/reward of a sizable rental real estate investment isn't there for you. I don't have children to help me (having a sociopathic kid named Michael might be handy), so I'll probably sell out within the next ten years. I won't want the hassle either. But it has been a good ride.

So much for my "cool story, bro" diatribe. So anyway, maybe think about that bond/senior debt idea and tell me what you think. I'd like to hear from others who are thinking about income investments now too. What are your thoughts on looking at medium term senior debt in this environment?

Keep in mind also that munis as an asset class aren't as safe as they traditionally were. Some are still okay but others have been bitten by the underfunded pension bug.