What Is Income Investing?
An investing strategy focused on generating regular cash payouts rather than primarily capital appreciation.
The Full Definition
Income investing prioritizes investments that generate regular cash flow — dividend-paying stocks, bonds, REITs — over assets expected to grow mainly through price appreciation. It's especially common among retirees and others who need their portfolio to produce spendable income rather than just grow on paper. The tradeoff is that income-focused portfolios often grow more slowly than growth-focused ones, since companies paying out cash have less capital to reinvest in expansion.
Real-World Example
A retiree building an income portfolio might hold dividend-paying utility stocks, investment-grade bonds, and a REIT fund — collecting regular payouts to cover living expenses without having to sell shares.