Those of you who have been reading articles on personal finance, investing and technology for a while are probably familiar with the Monthly Income Plan. But just in case you're not, we have compiled all of the information you need to know in this blog post.
What is a Monthly Income Plan?
Simply put, a MIP is a way to put away your hard-earned money and generate income on it through an account that pays out monthly. This is done by providing the investor with an initial lump sum of money, as opposed to receiving financial assistance every month. In return, the investor agrees to make regular monthly payments of their own funds into the plan, usually for between 4 and 20 years. Depending on how much money you want to put away, your monthly payouts will differ from those of the standard MIPS.
Why do investors choose MIP?
The ultimate goal of this plan is to provide you with a monthly income that will last you the remainder of your life, or until you start another MIP. There are many reasons why investors choose to pursue this option. Some of the most common include:
- Investing their money in a safe and easily accessible account that can generate interest on their capital. This type of account will also pay out regular dividend payments every month, as opposed to receiving a single lump sum at the end of the term.
- Maintaining some level of control over their personal affairs while leaving other aspects to someone else's discretion.
- The peace of mind that comes from knowing their income will still be coming in even if their money is tied up in other forms of investment or property.
How to qualify for MIP?
In order to qualify for a MIP, the investor must meet some important criteria. First and foremost, they must have an existing source of income that will cover their basic living expenses, as well as provide them with a bit extra for leisure activities and/or hobbies. They must also have a regular source of income that generates enough capital to cover the lump sum payment required when opening the account. This source can be either employment or self-employment.
How Does a Monthly Income Plan Work?
So how exactly do you go about setting up your very own monthly income plan? The process isn't too complicated, but it isn't necessarily a quick one either.
The first step is to find an individual or company from within the country you reside in that offer MIPs. This can be done by going online, contacting local financial advisors, or even speaking with your bank manager. Before sending off any money, make sure to check their credentials and read some reviews of past clients who have worked with them before.
Once you've found the right firm for your needs, you'll need to fill in a few forms and provide information about yourself and the source of your income. This includes details such as your name, address, birth date, and contact details. It will also require you to provide information about your existing income sources, including proof of employment or self-employment. This can come in the form of:
- Your recent pay stubs.
- A letter from your employer certifying your employment status.
- Proof of self-employment such as business registration documents and tax returns from the previous year.
Once you're set up with a monthly income investment plan, you'll need to keep paying into it every month. As was mentioned earlier in this article, the exact amount will vary depending on how much money you invested in the first place and how long the contract lasts.
The last thing you'll need to do is to make sure you have the right kind of MIP account. This will usually be an investment type of account that is specifically designed to work with monthly income plans and will be governed by some government regulation. Most will come with an annual fee, but this fee can be waived if you stay within certain limits.
Standard Features of a Monthly Income Plan
If you've decided to invest in a MIP, then there are some features that most of these investment products share at least some common traits. Here are just a few:
Let's start by looking at the basics.
You may already be aware of this, but a MIP is an account that allows investors to put away money and earn interest on it. However, in order to receive a regular income from this account, you will have to continue making your monthly payments to it for a set period of time. The length of these payments will depend on the length you've decided on when signing up for the MIP.
MIPs are also known for their high degree of flexibility and reliability. This is because the investor maintains full access to their capital throughout the duration of their contract with no restrictions whatsoever. This can be great for investors who want to receive income from their investments for the rest of their life, or even beyond it. However, this level of flexibility also tends to attract a lot of criticism from other investors looking to keep control over their money.
A MIP is an account that allows investors to put away money and earn interest on it. However, in order to receive a regular income from this account, you will have to continue making your monthly payments to it for a set period of time. The length of these payments will depend on the length you've decided on when signing up for the MIP.
Lastly, MIPs are typically offered as a lump-sum payment at an agreed-upon point in time. As such, they won't necessarily replace other investment products that are available in your country or region. For example, people who have decided on a regular monthly income plan might also have chosen to invest in property instead of buying stocks and shares through a regular brokerage account.
