As income investors, the goal for most of us is to find a solid stock with an above-average yield and stay for the long haul. 

#-ad_banner-#Anyone who is familiar with my premium newsletter, The Daily Paycheck, knows we try to do just that by searching for securities that will do one of three things: maximize income, maximize growth or minimize risk. We consider these key traits the three interlocking gears of our retirement system’s engine. They work together to ensure our portfolio runs as smoothly and efficiently as possible. 

But we’ve also found a way to turbocharge that engine. By adding one simple feature, we’re able to greatly multiply our portfolio’s capacity to generate consistent income. I’m talking about reinvesting dividends. 

Dividend reinvestment is a powerful strategy that too few investors take advantage of, largely because it rarely gets talked about by the financial community. Dividend reinvestment pays you more over the long haul because it puts your dividends to work. When you use your dividends to purchase more shares, those additional shares pay you higher dividends, which in turn buy you more shares.

In a nutshell, dividend reinvestment compounds your growth and can increase your income potential exponentially. 

But as much as we love dividend reinvesting, there’s one thing we like even better: monthly dividend payers.

You see, the Daily Paycheck strategy is all about building a stream of income that pays you constantly… ideally enough dividends so that you get paid every day of the year.

That means you should strongly consider monthly dividend payers. With securities that deliver “paychecks” every 30 days, the income can add up quickly.

And let’s not forget another big plus — if you’re at or near retirement, you’ll need a steady stream of monthly checks to pay your bills. Investing in monthly dividend payers is the best way to ensure your money will be there when you need it. 

This is why we focus heavily on monthly dividend payers in my newsletter. In fact, roughly one-third of our portfolio in The Daily Paycheck is invested in monthly payers.

With this in mind, I pored over all our holdings and pinned down four of my favorite monthly dividend payers. If you’re looking for regular dividends 12 times a year, then you should consider starting with the securities listed below…

I won’t go into details on all of these securities, but I will say that the PIMCO 0-5 Year High Yield Corporate Bond Index Fund (NYSE: HYS) has been a cornerstone holding in The Daily Paycheck for some time.

Fixed income securities are sensitive to interest rate increases. Since U.S. interest rates are at historic lows, when rates eventually move, they will move up. But that’s no reason not to invest in fixed-income bonds — as long as you own the right ones.

Some fixed-income securities are less sensitive to rate changes than others. Shorter maturity bonds are less sensitive to interest rates. Higher-yielding bonds are also less sensitive to interest rates. This fund offers the best of both worlds.

HYS was launched on June 16, 2011. The fund has continually raised dividends since inception, and now pays a monthly dividend of roughly $0.45 per share. That equates to a yield above 5%. 

PIMCO understands the needs and risks of today’s fixed income investors, and all of the bonds in HYS’s portfolio mature in less than five years. With all this in mind, HYS is a good choice for those looking to tap into the stability of bond income, with minimal interest rate risk.

Editor’s Note: While these securities represent some of my favorite monthly dividend payers right now, market conditions can and do change. For the latest analysis, you’ll need to be a Daily Paycheck subscriber for updates on all our holdings. 

If you’re looking to find more stable high-yielders in a rising interest rate environment, then I encourage you to try out my premium income newsletter. In each issue, my subscribers and I navigate the market to find bigger yields and more gains in a world of low yields and all-time high stock prices. To learn more, go here.