What is a safe investment that will yield at least 5% annual return?

Question

I don't just mean CD's, money markets or bonds..which are dismal these days. What about rental property or other ways to invest say 20k or more? I am fully invested in the stock market and seeking another option.

Answer 1

When you say "safe" investment, you eliminate a number of options.  If you don't want bank products or treasury bonds, I don't have much advice.  Rental properties are risky.  Investor's bought rental properties during the real estate boom thinking the rent money would cover loan payments.  Many were wrong.

If you give us a better idea of your risk tolerance, you may get some ideas.

Answer 2

There are lot's of great options.

Bonds: 6% - 7% APR

CD's: 9%-15%APY

To my mind the best way to invest money is to invest in someone's business. It's safer and more profitable. I have invested in my friend's small business and now I am getting guaranteed 40% annual interest.

I wish you success!

Answer 3

How about 7% with an expected annual increase in the dividend rate.  Sound too good to be true?  Actually it is not but it of course is not completely safe either.  I do however think it is reasonably safe.  ETP currently pays 7.2% and PAA currently pays 7.1%.  SXL currently pays 6.9%.  If you time your buy correctly I am sure you can get 7%.  They are pipeline LPs.  They have all shown 5 year annual returns of better than 15%.  I really do not think any of them are going away any time soon nor do I believe any of them will reduce their dividend.  They have all raised their dividend almost quarterly.  

Here is another option for you to consider.   RNP currently pays over 10%.  It is a closed end fund investing in preferred stock and REITs.  The main downside to that investment is inflation.  10% sounds great today but it might not sound all that great tomarrow when inflation is running at 12%.  That is what happened in 1979.  Looking like an almost sure bet for next year.

Answer 4

I have to assume you are from the US, because here in Australia you can get 7 to 8% safe returns just from opening an online saver linked to a normal savings account (Rabobank, Suncorp, Commonwealth Bank, Bankwest), and that is for any amount. I guess that doesnt help you if you dont have a trusted friend here!