We talk about Wealth Builders versus Wealth Killers – and recognizing the difference between the two. One of the biggest Wealth Killers? Scams, including those related to “passive income.” My advice: If you want generous income, focus on names like Angel Oak Financial Strategies Income Term Trust (FINS), suggests Bill Patalon, chief stock picker at Stock Picker’s Corner.
I see scams all the time. And my years of experience have taught me that those scams gain effectiveness by keying on investor emotion — whether that emotion is greed or fear. They also gain effectiveness by keying on “current events” — like inflation, the need for income, and how uncertain consumers feel these days.
Want an example? Look at all the ads running for “passive income.” By definition, “passive” means “you don’t really have to do anything to get it.” But some of these ads are for “programs” or “side hustles” or “activities”...things you have to pay for…side jobs you have to take…moves you need to make.
Angel Oak Financial Strategies Income Term Trust (FINS) 
Most of these are really designed to separate you from your money. They involve risk — and are payoff “long shots.” Even the best ones call for you to invest extra time. In my book, that’s not “passive.” And many of these also aren’t “income.”
What folks really need to do is look at income as “cash flow” — what actually goes into your pocket after taxes, the prevailing market interest rate, and the rate of inflation. That’s why I recently assembled a “Baker’s Half-Dozen” (which means seven, not six) list of income stocks – each with yields of better than 10%. That, my friends, is real “cash flow.” And it really is “passive” – once you make the investment, you keep getting paid until you cash out.
FINS is on that list. It’s a Big Board-listed, closed-end fund that invests primarily in financial-sector debt — including structured debt and mortgage-backed securities. It aims to keep at least 50% of its holdings invested in investment-grade debt. And it also buys financial-sector stocks, both common and preferred.
FINS recently was paying out $1.31 a share — as monthly 11-cent dividends. That equates to a yield of around 10%.
Recommended Action: Buy FINS.
