More than ever before the hunt is on for income by investors, particularly in the developed world. Cash on deposit at the bank pays a negligible amount of interest and even safe government bonds don't pay out that much either. Consider for example, 10-year US Treasuries; they now yield less than 3%. Even Gilts or British government bonds yield under 3% and that's with UK inflation running at 3-5%, depending which official measure is used.
Yield is the annual rate of return on an investment expressed as a percentage. So a share or a bond costing US$105 that pays out a dividend or coupon of US$5 a year yields 4.76%.
Although it is challenging to find relatively safe investments that generate decent levels of income it is not impossible. They are out there and the stock market is great hunting ground for income seekers, with literally thousands of stocks paying dividends. The great news is that more and more companies across the world are beginning to tune into investors' need for income and are becoming dividend stocks.