These aren't insignificant little $2 and $3 checks -- these are $50... $60... even $300 checks that can pay for your groceries, your gas, your fine dining, your weekend at the spa, your holiday shopping... your country club dues... or even more shares...


Dear Investor,

The recent bear market just wiped out over a decade of capital gains.

Millions of baby boomers invested their 401(k) plans in aggressive growth stocks and patiently waited for the promise of a comfortable and secure retirement. Income investing was for widows, orphans and the faint of heart.

How is that working out for the boomers? 

Well, things aren't quite going according to plan. Most 401(k) plans had barely begun to recover from the tech bubble when the financial crisis came along in 2007. 

And even now, with a market rally at our backs, the Dow Jones Industrial Average is hovering around 12,000 --  where it first hit in 2006. Five years of gains... gone.

But somewhere in the outskirts of Austin, Texas... one investor was able to avoid the worst of the turmoil.

That's because -- in the depths of the worst stock market of our lifetimes -- this man's portfolio was quietly churning out "paycheck" after "paycheck" -- providing him with a steady stream of income and a healthy dose of confidence, comfort, and optimism amidst the economic panic.

He was concluding a 24-month long "real money" case study with a new investing strategy -- one that focuses on safety and security, but that also offers a steady flow of cash to your bank account -- nearly every single day.

It's proven to be an overwhelming success...

This man collected 484 dividend checks worth a total of $41,161.63 in 2010 -- the equivalent of getting a $112.77 paycheck every single day this year.

That man is my boss.

His name is Paul Tracy, and he is StreetAuthority's Co-Founder and Chief Investment Strategist. The revolutionary income strategy he's discovered can turn your portfolio into a daily income machine -- and he's tapped me to share this strategy with all of you.

Why me?

Paul wanted me on the project because he knows I have a knack for making investing simple. He just had to take one look my Stock of the Month program.

I've also spent years working with Carla Pasternak and other high-yield experts in the income investing sector.  So Paul's "Daily Paycheck" strategy is right up my alley.

In fact, Paul has so much confidence in my abilities that he's asked me to not only share his strategy, but actually run StreetAuthority's latest income investing newsletter -- The Daily Paycheck.

This newsletter follows Paul's strategy to a "T". . . and even has a $200,000 real-money portfolio where I follow my own recommendations with StreetAuthority's money.

But before I get ahead of myself, I want to prove to you just how successful the "Daily Paycheck" strategy can be. . .

The Blueprint For Earning
59 Dividend Checks a Month

Before we dive into the details of Paul's overwhelmingly successful "Daily Paycheck" strategy, take a look at the dividends he collected just last December by using this new strategy in his personal portfolio.

This gives you an idea of what kind of checks you could squeeze out of your own portfolio if you simply follow this proven strategy...

Meet Amy

Amy Calistri is editor of The Daily Paycheck.

Amy holds a master's degree from the L.B.J. School of Public Affairs at the University of Texas, specializing in international economic and industrial policy. She also has an undergraduate engineering degree from Columbia University. Prior to joining the company, Amy was a senior researcher with Applied Economics Consulting Group, providing economic and financial analysis in support of commercial litigation.

In addition to holding a Series 3 certification, Amy has authored and instructed investment education materials used by a number of the major investment houses. She is also a recognized authority on the changing international regulatory policies affecting the casino/gambling sector. Amy is published in the areas of economics, statistics, and her other risk vs. return hobby -- poker.

Remember, in 2010, Paul's average daily paycheck was $112.77. But in December 2010 alone earned 59 checks worth $6,639.50, for an average of $214.18 a day!

This jump illustrates the awesome power of reinvesting your dividends -- you can literally watch your income stream grow each and every month.

Paul has done just that. In June 2010, he earned 44 checks... worth a total of $4,030.81. That comes out to an average payment of $134.36 -- and increase of +47% from just six months earlier.

And these aren't insignificant little $2 and $3 checks -- these are $50... $120... even $300 checks that can pay for your groceries, your gas, your fine dining, your weekend at the spa, your holiday shopping... your country club dues... or even more shares.

Keep in mind, we're only talking about dividends here... not cash from capital gains, which -- if you take into consideration -- are impressive in their own right: Several of Paul's holdings are up a total of +54%... +69%... +78%... +99%... even +108% and higher in the last 24 months. 

But he's not selling -- instead, he's leveraging the dividends to buy more shares, which is quickly leading to even larger paychecks. 

For example, back in January 2010 Paul collected 32 dividend checks for a total of $2,833.31... and he put every cent back into more shares.

That's why a few months later, in June, he collected 44 dividend checks for a total of $4,000 -- which he also reinvested.

As you can see, in December, the strategy paid off with 59 checks... for a total of over $6,639.50

With each month that passes, this "Daily Paycheck" strategy can pay you larger and larger dividends!

To look at it another way, consider how much your income can grow on a year-over-year basis...

Over the entire 12 months of 2009, Paul "only" collected 340 dividend checks -- with each check averaging $70.10.

Instead of spending his dividends, he reinvested them, helping him earn even bigger paychecks this year: In 2010 Paul collected 484 dividend checks worth a total of $41,161.63. One holding, the BlackRock International Growth and Income Trust (NYSE: BGY) has grown so large that it alone paid out $304.96 to Paul at the end of 2010.

And this is just the beginning as long as Paul keeps reinvesting. . .

The best news is you can follow in Paul's footsteps whether you have $100 or $1 million to invest. That's because his technique for daily income doesn't depend upon portfolio size. It simply hinges on 3 simple steps.

By following this 3-step guide to the "Daily Paycheck" strategy... you'll be able to earn a more frequent income stream that grows larger and larger each month.

And keep in mind, these are the rules that govern my new Daily Paycheck newsletter. If you'd like to learn more about The Daily Paycheck, simply visit this link.

Otherwise, keep reading to see these three "no-brainer" rules for building an increasing income stream with your portfolio. . .


Rule #1

"Forget chasing growth stocks. Invest in dividend payers."


It's a rule that should be etched into the granite walls of the NYSE: Never underestimate the power of the lowly dividend.

Although little respected and often ignored, more than 137 years of data point to the inescapable conclusion that owning humdrum dividend-paying stocks... and then reinvesting those dividends... beats all other investment approaches hands down. So if dividend-paying stocks make you yawn, it's time to wake up and smell the cash.

"I have made more money in retirement than I did when I was working. Income from dividend-paying stocks (which I collect every month) is even better than my greatest expectations.

-- William Briglia
Newport News, Virginia

In the go-go high-tech boom 10 years ago, income investors were laughed at as fuddy duddies.

Guess who's laughing now? With the markets near where they were a decade ago, dividends have been just about the only return seen by many investors.

Dividends, like the 11% yield seen from the First Trust Active Dividend (NYSE: FAV), are something that can't be taken away once they're paid.

In fact, since 1926 dividends have contributed 42% of the total return delivered by the markets. This makes a massive difference over the long haul. Underestimating the awesome edge income-paying securities give you is the biggest mistake you can make in your investing life.

The odds are so heavily stacked in their favor that income investors almost always come out ahead.

In the 100-yard dash to wealth, income investors start on the 50-yardline. What's more, every time the stock market corrects, growth investors are forced to run backwards for 10 yards. How can they win?

That's why The Daily Paycheck doesn't chase growth. If it comes with a fat dividend, I'll be more than happy to put my money in a fast-growing stock. . . but if not, then it's to the back of the line.

The Top Tip for Earning Daily Income

But investing in dividend payers alone won't build your portfolio into a daily income machine. That's where my top tip for daily income comes into play.

You see, a key aspect of the Victorian definition of a gentleman was someone able to generate enough income to live on from their existing fortune without eating into their seed capital.

Back then it was called "living off your four percents" -- which referred to government bonds that paid around four percent.

Today, Paul has coined a new phrase for this lifestyle. He calls it "living off your monthlies." 

That's because a critical component of the "Daily Paycheck" strategy calls for skewing your investments toward companies that pay regularly monthly dividends.

The idea is to load your portfolio with enough of these monthly payers -- such as the Reaves Utility Income Fund (NYSE: UTG) and Realty Income Corp. (NYSE: O) -- so that you get paid nearly every single day of the month... or more.

When you make the choice to invest in a stock that pays a monthly dividend, you'll probably be surprised when your first check shows up soon.

And you'll be surprised the next month, too, when another check arrives.

After the third month, you'll be spoiled -- you'll find it's easy to grow accustomed to this lucrative new source of passive income. Especially when you load your portfolio with monthly payers and you start getting these checks nearly every day.

And it's not just more convenient to be paid this often, you actually earn more that way. Thanks to the compounding phenomenon, a stock paying out 1% monthly doesn't have a yield of 12%, but actually 12.68% if you reinvest -- a big difference over time.

Plus, many of the best stocks offer extremely stable -- and growing -- income. Several of the monthly payers we've profiled in The Daily Paycheck have seen their dividends surge +100% or more over the past few years.

This combination of convenience, stability, and growing payouts make monthly dividend-payers an absolute "no-brainer" for your new "Daily Paycheck" portfolio.


Rule #2

"It's tempting to take the cash... but it's more profitable to reinvest it."


When you start collecting $60... $80... $120... even $300 dividend checks on a daily basis, your first instinct will be to cash them.

But unless you really need to, don't.


Dividends are one of the most powerful wealth-building tools in an investor's arsenal because of the phenomenon of compounding.

By reinvesting your dividend checks (instead of cashing them), you can buy more shares, which leads to even larger dividend checks.

These larger checks can then be used to buy even more shares and so on. In time, even a small stake in such stocks can grow into a tidy sum. 

(Reinvesting your dividends is a cinch. In fact, many dividend payers do it automatically -- and if they don't, just give your broker a call and he'll take care of it for you in a matter of seconds.)

Look what happens to a $20,000 investment earning a 7% annual yield that's reinvested.

As you can see, steady compounding yields amazing results over the long haul.

Thanks to the power of reinvested dividends and dividend growth, after 10 years your portfolio could be generating $5,299 in annual income -- that's +278.5% more income when compared to an investor who doesn't reinvest. 

In fact, you could be generating an effective yield of 26.5% based on your initial $20,000 investment.

It doesn't take a genius to see how quickly your income stream can grow when you invest this way.

That's why my $200,000 real-money portfolio always reinvests dividends into its holdings such as Kinder Morgan (NYSE: KMP). It's tempting to take the cash, but I know a little patience will only lead to larger paychecks.


Rule #3

"If you've got a choice between a 5% yield and a 10% yield, take the higher yield."


One of the easiest ways to increase your income stream is to invest in high-yielding securities.

All else equal, higher yields will pay you more.

This rule is such a "no-brainer" that it doesn't require further explanation. Clearly, higher yields put more cash in your pocket....

Portfolio Size Annual Cash Dividends at 5% Yield Annual Cash Dividends at 10% Yield
$1,000 $50 $100
$10,000 $500 $1,000
$100,000 $5,000 $10,000

Just a word of caution: One of the biggest mistakes income investors make is to flip open their copy of The Wall Street Journal and only buy the securities with the highest yields.

Although ultra-high-yielding securities paying 20% or more are tempting, keep in mind that common stocks don't guarantee yields or payouts. At any time, a company's board of directors can decide to cut its dividend distributions or eliminate them entirely.

So if you want to separate the high-yield gems from the high-yield junk, you need to look for a few traits of strong dividend payers. These include payout ratios below 80%, a strong history of payments, and strong cash positions.

Fortunately, there are still plenty of companies that meet this sort of criteria AND pay out hefty yields, such as Magellan Midstream Partners (NYSE: MMP) and Main Street Capital Corporation (Nasdaq: MAIN).

These are exactly the kinds of securities you'll want in your portfolio if you want to collect total monthly dividend checks of $2,000... $3,000... even $5,000 or more.

But where can you look for high yields? There are certainly plenty to choose from in the United States, thanks to the large number of companies that seek American investment dollars.

However, the truth is the U.S. markets are pretty stingy. The average U.S. stock pays less than 2.0%.

While you can find high-yielding stocks, odds are that anything paying above say, 15%, is a basket case. In fact, once you weed out the money losers, only 9 stocks in the entire United States pay more than 15%.

Just 9 lonely survivors. But guess what? Expand your horizon a bit and it's a completely different story.

Right now, there are actually 241 profitable companies yielding more than 15% -- they just don't happen to be in the U.S.

Nine here versus 241 abroad -- where do you think the best hunting ground is for a yield-hungry investor?

96% of the jaw-dropping yields these days are abroad. And not only are the yields higher overseas, but foreign markets are growing much faster than the U.S.

Why keep your money in U.S. stocks paying under 2.0% in a flat economy... when you can buy stocks yielding up to 15% or more in countries that are growing +5%, +6% and +7% a year?

That's why one of my first additions to my real-money portfolio was a fund focused on the Pacific Rim that pays over 6% in monthly installments.

Dividend Yields of Major Stock Indices

The average dividend yield of the S&P 500 today is just 1.7%. That's peanuts compared to yields in other developed nations...

Australia 4.2%
Czech Republic 4.8%
Finland 3.7%
France 3.6%
Germany 2.9%
Italy 3.6%
New Zealand 4.8%
Portugal 5.3%
Spain 4.7%
Sweden 2.3%
Taiwan 3.2%
U.K. 3.0%
U.S. 1.7%

The Oft-Ignored Strategy to Turning 6% Yields into 9% Yields

There is another way of boosting your income that's especially useful if you want to stay stateside with your investing.

Most of us consider ourselves patriotic citizens. But that doesn't mean we have to pay Uncle Sam any more than his fair share of our investment income. 

Unfortunately, when building income-oriented portfolios, many investors get blinded by high yields on fully taxable investments without stopping to consider how much cash will be left over after the government takes its cut.

Although tax-advantaged securities typically offer lower yields, in many cases they will put more cash in your pocket at the end of the day. This is particularly true for investors in higher tax brackets. 

For example, MS Insured Municipal Income (NYSE: IIM) pays $0.073 each month, for an annual yield of 6.0%. But if you're in the 35% tax bracket (keep in mind tax brackets could change very soon), the fund pays a taxable equivalent yield of 9.2%! As a fund holding municipal bonds, the income it pays is largely tax free! In other words, you'd have to find a fully taxable 9.2% yield to have the same cash in your pocket after the tax bite.

This is precisely the type of tax-advantaged situation that can
transform your portfolio into a daily income machine.

Next Step: Transform YOUR Portfolio Into a
"Daily Income Machine" That Pays You Every Day of the Month

In the report above, I revealed the inner-workings of the "Daily Paycheck" strategy.  Now it's YOUR chance to transform your own portfolio into a daily income machine...

At StreetAuthority, we're always looking for new ways to help our readers make more money. And because of the overwhelming success of this real-money case study, we've decided to offer a service based entirely on the proven "Daily Paycheck" concept -- aptly named The Daily Paycheck.

We launched the inaugural issue at the start of 2010 with $200,000 in my real-money portfolio. Thanks to the compounding power of dividends, my portfolio is already up nicely. But I'm still filling out my holdings and making adjustments to deliver the greatest amount of income -- and the highest returns -- possible.

So if you want to join me and add my favorite picks to your portfolio, I invite you to learn more by visiting this link.

Good Dividend Hunting!







Amy Calistri
Chief Investment Strategist -- The Daily Paycheck

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