ShmoopTube

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Finance a la shmoop. What is an income fund? Well it's a fund designed to

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produce income for its investors yeah shocking to hear that I bet. That's [Definition of an income fund written on a 100 dollar bill]

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income, cash like bond interest and equity dividends they come in both [Different types of income pointing to a pile of cash]

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managed and unmanaged forms like mutual funds and index funds yeah they both [The two types of forms are shown]

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have Income Fund flavors and they exist solely to distribute cash to investors

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from which you know those investors can purchase luxury items like food and heat. [Income fund distributing cash]

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All right well who buys these income funds, while mostly old people generally [Old woman on the phone]

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retirees people who can't take a ton of risk and who no longer work for their

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cash and while they need it to come from their savings [ATM]

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you know the cash to pay the rent in the food thing and those savings have been

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socked away for years via hardwork harvesting stuff in the fields or [Money shoved into a sock]

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driving people to the airport or you know making assistants disappear and [Bird flies into a hat and disappears into a plume of smoke]

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very generally speaking income funds don't really grow at least not all that

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much, many of them have target distribution levels like three four five

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percent so that excess cash is sent back to the fund holders on a regular steady

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basis and the funds boringly live to throw off cash another day, tada! [Guy pulls cash out of the magicians hat]

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That's how it goes..

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