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The Income Factory: An Investor's Guide to Consistent Lifetime Returns
The proven, all-weather investing strategy that delivers long-term, consistent returns
The most common investing approach today--one that values "growth" over all else-- can be ineffective and counterproductive for many investors, not to mention needlessly stressful.
Now, one of Seeking Alpha's most popular writers, Steven Bavaria, provides a groundbreaking alternative that will see you through all markets--up, down, and sideways. The Income Factory shows how to build an income stream that increases solidly and consistently--a result of re-investing and compounding the dividends. And the best part? This income stream actually grows faster during market downturns than during flat or rising market periods.
The Income Factory sheds light on:
- Why "high-yield" doesn't have to mean "high-risk"
- How credit investments perform more predictably than equity investments
- Why "junk" is a misnomer--and why high-yield debt is safer than most of the stocks investors own
- How to grow your wealth steadily without following the markets obsessively
Through Bavaria's strategy, cash income increases year after year at a predictable rate. For example, a 9% yielding portfolio doubles and re-doubles every 8 years. If you're in for the long haul, an Income Factory lets you achieve your goals and still sleep well at night.Investing does not have to be about picking specific horses and hoping they win the race. An Income Factory achieves its goals by essentially betting on horses to make it around the track and finish the race.
Those are easier bets to win, and they don't require us to be glued to the financial news 24/7.
The most common investing approach today--one that values "growth" over all else-- can be ineffective and counterproductive for many investors, not to mention needlessly stressful.
Now, one of Seeking Alpha's most popular writers, Steven Bavaria, provides a groundbreaking alternative that will see you through all markets--up, down, and sideways. The Income Factory shows how to build an income stream that increases solidly and consistently--a result of re-investing and compounding the dividends. And the best part? This income stream actually grows faster during market downturns than during flat or rising market periods.
The Income Factory sheds light on:
- Why "high-yield" doesn't have to mean "high-risk"
- How credit investments perform more predictably than equity investments
- Why "junk" is a misnomer--and why high-yield debt is safer than most of the stocks investors own
- How to grow your wealth steadily without following the markets obsessively
Through Bavaria's strategy, cash income increases year after year at a predictable rate. For example, a 9% yielding portfolio doubles and re-doubles every 8 years. If you're in for the long haul, an Income Factory lets you achieve your goals and still sleep well at night.Investing does not have to be about picking specific horses and hoping they win the race. An Income Factory achieves its goals by essentially betting on horses to make it around the track and finish the race.
Those are easier bets to win, and they don't require us to be glued to the financial news 24/7.
240 pages, Hardcover
Published February 27, 2020
188 people are currently reading
384 people want to read
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Displaying 1 - 30 of 33 reviews
July 16, 2022
I have read 55 pages & found a lot of repetition. Investing for dividends is a pretty straightforward concept; it should not have taken more than four pages to explain.
May 16, 2020
I was very surprised to discover this book since it describes an alternative investment strategy focusing on generating income streams. I have been thinking along the same lines for the last year and have tried putting together my own "income factory", but to find the strategy described in detail was just amazing. Not only to get some verification of my own ideas, but all the theory and experiences of another person confirming asumptions I was still pondering.
By getting this book and adhering to its advice you will sleep better at night (its not the market price, its the income that matters). And you will see solid evidence every month or quarter in revenues generated from your investment, that this strategy really works.
By getting this book and adhering to its advice you will sleep better at night (its not the market price, its the income that matters). And you will see solid evidence every month or quarter in revenues generated from your investment, that this strategy really works.
January 19, 2023
I read a wide variety of literature, from academic-ish to fantasy fiction. I've realized that books which arise from a blog, or something similar, turn out to be a collection of edited past blog posts. The Income Factory is no different.
I'm not at all familiar with the concept of an income factory, but I had heard about it. Instead of buying a Seeking Alpha subscription for the author's blog, I checked out his book. I did learn what an income factory is, along with its various caveats, but there were often entire sections that were boilerplate; the book definitely could've been shorter. Besides boilerplate text, the various tables could've served as reference in the back of a shorter book. It's tedious to read an extended, basic analysis of a table.
I'm glad I read the book as the philosophy behind it resonated with me. However, it could've been done with a lot less pages and boilerplate.
I'm not at all familiar with the concept of an income factory, but I had heard about it. Instead of buying a Seeking Alpha subscription for the author's blog, I checked out his book. I did learn what an income factory is, along with its various caveats, but there were often entire sections that were boilerplate; the book definitely could've been shorter. Besides boilerplate text, the various tables could've served as reference in the back of a shorter book. It's tedious to read an extended, basic analysis of a table.
I'm glad I read the book as the philosophy behind it resonated with me. However, it could've been done with a lot less pages and boilerplate.
January 22, 2025
An interesting read for alternatives to equity investments or the traditional fixed income producing assets--CDs, bonds, preferred stocks, treasuries. He lays out risk vs. reward for several types of investments, many of which I had not heard of before. I'm not convinced, but it's worth exploring.
June 4, 2025
This has been the book that I have been looking for. Definitely kept me sane and confirmed that the current investing strategy I have is working and will continue to work!
Great book!
Great book!
May 12, 2025
A clear, easy-to-read (though repetitive) book on a income investing strategy for wealth building. Bavaria's case is fairly straightforward - he argues that it is possible to get long-term gains of 8-10% per year with specific income-based stocks, as an alternate path to the traditional equity (stocks) based path. While both will get you there (at least, in a tax-deferred account), he says, the income method may be better for some folks if it convinces you not to pull your money out during a downturn (because your income stream is still flowing). He takes pains to argue that the "Income Factory" method is not better, just different. Unfortunately, he restates over and over again the premise of the income factory method throughout the book, as though he expects readers to skip around and not read each chapter in order (maybe that happens?!). Just feel free to skim over whenever that happens and you'll be good to go.
He goes on to explain the various types of investments that are potentially useful for this strategy (almost all are types of "closed end funds" or CEFs, along with covered call funds), and provides several different options for each category (high yield bonds, preferred stocks, real estate, convertibles, etc) as well as lists many good CEF companies (Nuveen, Cohen & Steers, Gabelli, etc), and suggests that you take a CEF or two from each category to diversify. He also explains the different kinds of risks that are present with some of the funds (especially high yield bond funds), how they use leverage to boost return, and how the risks they take differ from the risks associated with stocks (for instance, owners of a failed stock get paid last, while debt-holders get paid sooner). He also spends a fair amount of time de-mystifying CLOs (collateralized loan obligations and explaining how they work, and does a very good job. I would have liked to see him explain more of these investments in that level of easy-to-follow detail.
My main practical complaint about the book is that he doesn't provide enough information (in my opinion) to help you evaluate specific "income factory" appropriate ETFs or CEFs yourself, beyond a recommended distribution rate of at least 7-8%. Sure, you can pick from his list of specific funds, but some of them are no longer available (which raises other questions about how confident you can be in this as a long term strategy) or you can just go with CEFs from well-known companies and hope for the best, but I would have preferred more guidance on how to evaluate them. I also would have liked more information on how best to apply this strategy to a taxable account (he gives a little, but this strategy is clearly intended primarily for IRAs and other such instruments). Still, a very eye-opening book for those of use who grew up with the "hold an index fund" strategy (or as Reddit calls it, "VOO and Chill".
He goes on to explain the various types of investments that are potentially useful for this strategy (almost all are types of "closed end funds" or CEFs, along with covered call funds), and provides several different options for each category (high yield bonds, preferred stocks, real estate, convertibles, etc) as well as lists many good CEF companies (Nuveen, Cohen & Steers, Gabelli, etc), and suggests that you take a CEF or two from each category to diversify. He also explains the different kinds of risks that are present with some of the funds (especially high yield bond funds), how they use leverage to boost return, and how the risks they take differ from the risks associated with stocks (for instance, owners of a failed stock get paid last, while debt-holders get paid sooner). He also spends a fair amount of time de-mystifying CLOs (collateralized loan obligations and explaining how they work, and does a very good job. I would have liked to see him explain more of these investments in that level of easy-to-follow detail.
My main practical complaint about the book is that he doesn't provide enough information (in my opinion) to help you evaluate specific "income factory" appropriate ETFs or CEFs yourself, beyond a recommended distribution rate of at least 7-8%. Sure, you can pick from his list of specific funds, but some of them are no longer available (which raises other questions about how confident you can be in this as a long term strategy) or you can just go with CEFs from well-known companies and hope for the best, but I would have preferred more guidance on how to evaluate them. I also would have liked more information on how best to apply this strategy to a taxable account (he gives a little, but this strategy is clearly intended primarily for IRAs and other such instruments). Still, a very eye-opening book for those of use who grew up with the "hold an index fund" strategy (or as Reddit calls it, "VOO and Chill".
September 2, 2023
What an inspirational book Steven Bavaria has written. It's knowledgeable and instructive. In my eyes, it is one of the best books on value investing since The Intelligent Investor by Benjamin Graham.
The book's primary subject is the return on capital investment. How do we as individual investors (administrators of our pensions) get the highest yields and the best compounding of our investments? High Yields, reinvesting of these, and the compounding effects are essential themes in this book. A 0,5 % higher yield a year has a high impact 30-40 years into the future.
I believe this book should be read by anyone interested in creating one's own Income Factory. It is naturally written for an American context (regarding taxes). However the strategies and asset classes are available to investors all over the world.
The book is interesting and if you're interested in maximizing your earnings in your pension funds. This is the book you should read. I will also recommend the audience to follow Steven Bavaria on the link: Seeking Alpha news site/a>
The book's primary subject is the return on capital investment. How do we as individual investors (administrators of our pensions) get the highest yields and the best compounding of our investments? High Yields, reinvesting of these, and the compounding effects are essential themes in this book. A 0,5 % higher yield a year has a high impact 30-40 years into the future.
I believe this book should be read by anyone interested in creating one's own Income Factory. It is naturally written for an American context (regarding taxes). However the strategies and asset classes are available to investors all over the world.
The book is interesting and if you're interested in maximizing your earnings in your pension funds. This is the book you should read. I will also recommend the audience to follow Steven Bavaria on the link: Seeking Alpha news site/a>
June 16, 2025
Enjoyable read and slighlty contrarian to the "Vanguard and chill" index strategy.
The core idea is to use the cash your portfolio generates to buy more assets when their prices are low. This can make your income grow faster during a market fall and helps prevent you from selling at the wrong time.
You do not need to find 'superstar' companies that will grow dramatically. You need to find assets that can reliably pay their distributions. Bavaria writes that your investments only need to "finish the race... not win, place, or show."
The author says you should think of your portfolio as a factory. Your job is to increase the factory's cash output, not to worry about its daily sale price. This helps you focus on your long-term goal.
The most persuasive part is that:
1. You do not need to 'time' the market, or even to time your exit (which is a major drawback of the index fund, if you are retiring but 2008 happens).
2. Its easier to manage your psychology when stocks tank 20% if you're still receiving the same cash each month.
One challenge is that the author is perhaps overly optimistic about future yields / dividends. Is this 'more' secure than index fund / basket of equities?
The core idea is to use the cash your portfolio generates to buy more assets when their prices are low. This can make your income grow faster during a market fall and helps prevent you from selling at the wrong time.
You do not need to find 'superstar' companies that will grow dramatically. You need to find assets that can reliably pay their distributions. Bavaria writes that your investments only need to "finish the race... not win, place, or show."
The author says you should think of your portfolio as a factory. Your job is to increase the factory's cash output, not to worry about its daily sale price. This helps you focus on your long-term goal.
The most persuasive part is that:
1. You do not need to 'time' the market, or even to time your exit (which is a major drawback of the index fund, if you are retiring but 2008 happens).
2. Its easier to manage your psychology when stocks tank 20% if you're still receiving the same cash each month.
One challenge is that the author is perhaps overly optimistic about future yields / dividends. Is this 'more' secure than index fund / basket of equities?
December 8, 2024
Enjoyed the book – 4/5!
Like most books on investing, some principles and arguments don’t fully apply to European investors due to the lack of tax-exempt accounts available in the United States. Additionally, MiFID II regulations limit access to certain investment vehicles via European brokers, or they come with hefty fees. Personally, I can access some of these on ING-DiBa in Germany, but not all the options discussed in the book.
The mathematics checks out, and Steven proposes an intriguing approach: investing in high-yield instruments (e.g., CLOs, CDOs, high-yield bond CEFs) that yield above market average. This allows for reinvesting the difference and potentially achieving or exceeding the S&P 500’s historical 8% yield. I gained valuable insights into various funds, such as buying when the Net Asset Value (NAV) exceeds the current valuation.
I also appreciated the discussion on how investing in assets backed by company loans can be safer than holding the company’s stock. In the event of bankruptcy, creditors are prioritized over shareholders.
This approach, however, isn’t for the faint-hearted and requires more effort than standard investment in blue-chip dividend stocks. Some strategies, like investing in a call-covered options CEF instead of managing the calls yourself, seem practical. Others, like investing in a CEF with constant NAV erosion due to a poorly allocated strategy, may carry higher risks—despite the high yield and reinvestment potential.
I’ve been gradually allocating some of my investments toward an Income Factory strategy, leaning more on the conservative side. Overall, this book offers a refreshing perspective and provides valuable insights into alternative investment strategies.
Like most books on investing, some principles and arguments don’t fully apply to European investors due to the lack of tax-exempt accounts available in the United States. Additionally, MiFID II regulations limit access to certain investment vehicles via European brokers, or they come with hefty fees. Personally, I can access some of these on ING-DiBa in Germany, but not all the options discussed in the book.
The mathematics checks out, and Steven proposes an intriguing approach: investing in high-yield instruments (e.g., CLOs, CDOs, high-yield bond CEFs) that yield above market average. This allows for reinvesting the difference and potentially achieving or exceeding the S&P 500’s historical 8% yield. I gained valuable insights into various funds, such as buying when the Net Asset Value (NAV) exceeds the current valuation.
I also appreciated the discussion on how investing in assets backed by company loans can be safer than holding the company’s stock. In the event of bankruptcy, creditors are prioritized over shareholders.
This approach, however, isn’t for the faint-hearted and requires more effort than standard investment in blue-chip dividend stocks. Some strategies, like investing in a call-covered options CEF instead of managing the calls yourself, seem practical. Others, like investing in a CEF with constant NAV erosion due to a poorly allocated strategy, may carry higher risks—despite the high yield and reinvestment potential.
I’ve been gradually allocating some of my investments toward an Income Factory strategy, leaning more on the conservative side. Overall, this book offers a refreshing perspective and provides valuable insights into alternative investment strategies.
June 20, 2024
I found this book very informative, I have never thought about investing that didn't mention growth. The income factory in simple terms states to invest in low cost closed fund, CLOs that can handle turbulent market conditions with the goal of not growing the stock price, but consistently reinvesting the dividends received in these low cost funds to reach your income factory. With the dividends for a lot of these companies being a bit low and the cost of entrance being low, usually in the 10-20 rangem I can see how this would be a valuable conservative investment strategy for an investor who has 500k they want to divide and conquer with by investing minimum 50k into these funds, since the cost is low and the dividends also low, with no growth the price rarely goes up or down, so you need to have a large amount of shares to make the dividends worthwhile. I appreciated learning more about these options that I had never thought about before. While I am not likely to utilize this strategy today, I could see myself utilizing it once I need to become more conservative.
April 7, 2023
Bravo Bavaria
My journey to this place where Mr. Bavaria resides has been long, fraught, and tortured. For the uninitiated or the reformed trader, The Income Factory is about as close to investment management heaven as one can get. The “river of cash” that one experiences with Mr. Bavaria’s approach — mostly monthly — soothes and refreshes. And, most importantly, compounds and accumulates. Mr. Bavaria’s clean writing style and knowledge and experience with business development corporations, the variety of closed end funds, and collateralized loan obligations gives the reader most everything necessary to build, manage, and grow a financially rewarding “income factory”.
My journey to this place where Mr. Bavaria resides has been long, fraught, and tortured. For the uninitiated or the reformed trader, The Income Factory is about as close to investment management heaven as one can get. The “river of cash” that one experiences with Mr. Bavaria’s approach — mostly monthly — soothes and refreshes. And, most importantly, compounds and accumulates. Mr. Bavaria’s clean writing style and knowledge and experience with business development corporations, the variety of closed end funds, and collateralized loan obligations gives the reader most everything necessary to build, manage, and grow a financially rewarding “income factory”.
June 16, 2025
El autor defiende en el libro la estrategia de inversión en la que cree: priorizar el income sobre el total return. A partir de esa premisa propone una serie de closed-end funds (nombra hasta 64 de diversos estilos), buscando una rentabilidad de entre el 8% y el 10% dependiendo del grado de riesgo que se quiera asumir.
Todos los fondos están referenciados en dólares y no creo que se puedan contratar desde ningún broker español (aunque algunos probablemente estarán disponibles en Interactive Brokers).
Y por supuesto no falta la sección dedicada a las cuentas libres de impuestos estadounidenses.
En líneas generales, muy repetitivo y de limitado interés para un inversor europeo.
Todos los fondos están referenciados en dólares y no creo que se puedan contratar desde ningún broker español (aunque algunos probablemente estarán disponibles en Interactive Brokers).
Y por supuesto no falta la sección dedicada a las cuentas libres de impuestos estadounidenses.
En líneas generales, muy repetitivo y de limitado interés para un inversor europeo.
September 29, 2021
Good book overall, interesting way to think about investing/returns, I've used party of this strategy for years.
The disappointing part is races are not even mentioned until the second half of the book, and no significant analysis is done on that impact. Not an issue if you're working in a 401k but in a non retirement account, that 15-25% hit on a 6-10% return is massive.
I still prefer the steady stream of dividends (vs relying on growth/price appreciation) but taxes are a bigger component than the book covers.
The disappointing part is races are not even mentioned until the second half of the book, and no significant analysis is done on that impact. Not an issue if you're working in a 401k but in a non retirement account, that 15-25% hit on a 6-10% return is massive.
I still prefer the steady stream of dividends (vs relying on growth/price appreciation) but taxes are a bigger component than the book covers.
April 18, 2022
Different but thought provoking
It’s an interesting idea. I admit to being skeptical at first, but he did a really good job of explaining the concept. I’m going to have to do some research but there are definitely some ideas I expect I will implement in my portfolio. I will be taking a look at his Seeking Alpha blog as well. It seems worth the price to explore the idea further. Even if the idea isn’t for you I would encourage someone to read the book because he does a good job of exploring different types of risk/reward in asset classes.
It’s an interesting idea. I admit to being skeptical at first, but he did a really good job of explaining the concept. I’m going to have to do some research but there are definitely some ideas I expect I will implement in my portfolio. I will be taking a look at his Seeking Alpha blog as well. It seems worth the price to explore the idea further. Even if the idea isn’t for you I would encourage someone to read the book because he does a good job of exploring different types of risk/reward in asset classes.
June 13, 2022
A good guide to “rolling your own.”
I was introduced to Steven Bavaria’s writings on the web site “Seeking Alpha.” This book expands on those writings. Steven’s framing of investing as “building a factory” whose product is cash appealed to me. His explanation of Collateralized Loan Obligations (CLOs) and the role they can play in one’s portfolio alone is worth the price of this book.
I was introduced to Steven Bavaria’s writings on the web site “Seeking Alpha.” This book expands on those writings. Steven’s framing of investing as “building a factory” whose product is cash appealed to me. His explanation of Collateralized Loan Obligations (CLOs) and the role they can play in one’s portfolio alone is worth the price of this book.
March 18, 2021
Interesting
The book is interesting and provocative. It gives a very detailed look of the author summarising years of experience and cases. For me the detailed look about CLO's was very useful. I was intrigued with the development of the rating in the years.
The book is interesting and provocative. It gives a very detailed look of the author summarising years of experience and cases. For me the detailed look about CLO's was very useful. I was intrigued with the development of the rating in the years.
Read
June 30, 2021The income factory strategy would look for stocks and other investments that pay out 8-10% in dividends or distributions, thereby getting its entire targeted quite return in cash and not having to worry about whether it gets any of it from dividend growth and market appreciation.
This entire review has been hidden because of spoilers.
May 4, 2023
Eye-opening approach to dividend investment as opposed to equity growth. However, not very practical from an European retail investor standpoint as all the strategies are based on assets and tax exemptions which are only availble in the US
October 31, 2024
Great alternative perspective on investing.
Anyone that is self managing their portfolio in or near their decumulation stage needs to read The Income Factory. It is not everyone's cup of tea, but it is a great alternative approach to asset management.
Anyone that is self managing their portfolio in or near their decumulation stage needs to read The Income Factory. It is not everyone's cup of tea, but it is a great alternative approach to asset management.
February 8, 2025
I'm not an expert at finances so how much of this book is sage advise and how much is bull is left as an exercise. I'll continue to read in this domain to acquire the knowledge I need. For me, this books premise is up my ally and I hope it actually works!
May 22, 2020
Idea was interesting but it seemed to risky to me
September 1, 2023
Could have been a 10 page book ...
November 2, 2023
Good explanation of income investing, although it doesn't work well in audible without the charts mentioned.
May 1, 2024
Good. Mostly a glorified reinvest-the-dividends strategy. But I appreciated the argument that yield and appreciation grow the same if you always reinvested your dividends.
April 21, 2025
New approach to increase returns
Fairly easy read, great examples and case studies. Love the fact that teaches with examples on how to maximize your return
Fairly easy read, great examples and case studies. Love the fact that teaches with examples on how to maximize your return
Read
July 7, 2025Makes an excellent case for income investing, includes helpful content on CLOs.
(I listened to the audio book.)
(I listened to the audio book.)
September 1, 2025
Good food for thought in regards to investing with some portfolios to get started. Worth a read
September 7, 2025
Served as a good reminder there are no shortcuts when investing. Embarrassed I fell for decent reviews and bought this book.
November 14, 2025
Great for novice and non-novice personal investors.
October 1, 2025
A good one for an introduction to some less well known investments that can match the oft-desired equity return level (at least 8-10% annual) without relying purely on asset appreciation. Good intro to closed end funds (CEFs) and collateralized loan obligations (CLOs).
Displaying 1 - 30 of 33 reviews