Schwab Review: Setting Up Automatic Investing for Passive Income

charlie_imagePutting my money where my mouth is real important to me. Hopefully as I’ve been blogging along in showing you how easy it is to make passive income streams you’ll see how we at TTG are all about keeping it real. Not just talking a good talk, but giving you practical ways to setup passive income streams. In my latest attempt to create another passive income stream, I came upon Charles Schwab’s monthly income fund.

I was looking for an investment that could provide me with another leg of my stool to passive income. One that wouldn’t take a lot of money and very little time to start up.



Schwab Review

  • No load – all of their monthly income funds have no loads. Real sweet deal for people wanting to start with a small balance and grow this account.
  • Low initial minimum deposit – LOVE THIS FEATURE! Only $100 initial deposit required to setup an automatic investment, which only encourages you more to make automatic deposits into this investment (like your 401k). Then you can contribute as little as $1/deposit after your initial deposit.
  • Reasonable managed fund expenses – currently at .57% is really rather low for an actively managed fund with 14% turnover in stocks.
  • Investment options that pay out monthly – most of your stocks or mutual funds offer quarterly dividends and/or yearly capital gains. This investment is a good option for paying out monthly (if you want that choose) and kind of operations like an active pension that you can continue to contribute to.
  • Options for payouts of dividends and capital gains – when you sign up for the Schwab Monthly Income Fund, you can choose from 1) reinvest capital gains and dividends, 2) reinvest capital gains, or 3) none. I love this option, because you can choose to pay yourself monthly or monthly and a larger check in December. If you don’t like any of those options, then just put all the money back into purchasing more shares each month. It is nice with an investment like this to have the freedom to choose.

How to setup automatic investing at Schwab for passive income?

  1. Sign up for an account
  2. Add External Accounts (Step 1)
  3. Start the enrollment process (Step 2)
  4. Put in your bank financial information (Steps 3 – 9)
  5. Submit an online transfer (Steps 10 – 15)
  6. Trade the Monthly Income Fund (Steps 16 – 18)
  7. Enroll in Automatic Investing (Steps 19 – 23)

Below are my step by step instructions for how I setup my passive income stream with Schwab’s monthly income fund.

Step 1
Step 2
Step 3
Step 4
Step 5
Step 6

As you can see signing up for the Schwab Monthly Income Fund is super easy, and doesn’t require a lot of time and effort in creating another passive income stream.

I’d love to hear from our readers on what monthly income investment you do to make another side income. What program/investment should I look at next for creating another passive income stream? Tell me about it and I just might try it out! Leave a comment below and I’ll get started!

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