Summary of Investment Earnings

As an educated investor, you should be able to identify the different ways in which investors receive earnings from their portfolios. You should also be aware of the differences between income generated from stock investments and income generated from bond investments. Finally, you should have an understanding of how investment earnings are taxed and what implications that has for the investor.

Earnings can come from interest, dividends, and capital gains. Different investors will have their own objectives that help them determine how to receive their earnings. They should target those investments that have the earnings characteristics that they desire.

Let’s look at the important issue of how taxes and inflation affect your investment income.