Increasing Your Portfolio Income With Private Credit Investments

Usually, the main goal of investing is to build wealth and secure your future. But you can, and should, also invest for the present. A well-balanced portfolio includes growth-focused assets as well as income-producing assets that can help you pay for holidays, education, home upgrades, and other expenses.

Private credit investing can be a valuable option for those looking to enhance the income potential of their investment portfolio, as it often delivers consistently higher returns compared to other standard investment options like shares and property.  

At PSA Capital Investments, we support Aussie businesses with fair and affordable lending while offering investors a secure, income-generating investment opportunity. Here’s how you can use private credit investments to build an income portfolio that supports your lifestyle.  

What’s an Income Portfolio?

Most people invest primarily with their future in mind, and that’s perfectly fine. But earning an income now from your investments is just as important as building wealth for tomorrow, especially if you’re young and have lots of expenses. As you pick which assets to invest in, we recommend building an income portfolio.   

An income portfolio is an investing strategy that’s focused on generating regular cash flow from interest, dividends, or capital gains. This supplements your regular income and can help cover lifestyle expenses.

You can also reinvest your earnings to grow your income portfolio and earn even more income in the future.

The ideal ratio of income and growth assets in your portfolio depends on your stage of life and financial goals.

If, for example, you’re planning to start a family or already have one, increase your income assets to ensure you can handle the higher family expenses. You may also want to shift more towards income assets as you near retirement to create a stable stream of income.

Generally, a good income portfolio will have an even or almost even split between income and growth assets. This can be 50:50 for those who prefer a moderate approach, 60:40 (income to growth) for those who want a more aggressive earnings strategy, or a more conservative 40:60 or 30:70 split if you want to boost your income while still investing for the future. At PSA, we can help you determine the best balance for your specific situation and goals.

How Private Credit Can Boost Your Investment Portfolio Income

Private credit has grown rapidly in the last few years as businesses seek financing alternatives to traditional banks. It’s estimated that private credit accounts for $40 billion or about 2.5% of total business debt in Australia.

Private credit investing has grown along with it, giving investors an opportunity to earn more passive income from their investments.

Here’s how private credit investing works:

1. Businesses that can’t get loans from banks, because of bad credit or some other reason, turn to a private lender, usually a private credit fund. They must pass a lending criteria that considers the health of the business, credit history, collateral, and other factors.  
2. The private credit fund gets money to lend to businesses from investors. The fund makes money from interest on these loans and other fees
3. The fund makes regular interest payments to investors at a specified rate.

The ROI varies among different private credit funds, but generally, private credit investing delivers higher returns than many other types of investments.

That said, as with all investments, private credit has its risks, and it’s important that you choose the right fund to invest with. In particular, check their risk profile and make sure it matches your risk tolerance.

Investing With the PSA Private Credit Fund

At PSA, we’ve designed our private credit fund for sophisticated investors looking for a high-yield, secure investment.

Our credit fund investors receive, on average, over 8% per annum return on investments. We make quarterly interest payments, so you get a regular income stream that enables you to manage your lifestyle expenses the way you want.

We prioritise capital preservation, ensuring minimal risk exposure. We do this by:

• Requiring at least 160% security backing on credit loans
• Lending only to businesses (no consumer lending)
• Offering friendly loan terms that make it easier for borrowers to repay and exit early, reducing the risk of default
• Having a fast recovery process in case of a loan default. In most cases, we are able to recover the loan amount via collateral within a month

Increase Your Passive Investment Income With PSA

Requiring only a minimum initial investment is 100K AUD, the PSA private credit fund could be the ideal choice for those seeking a safe investment that delivers steady passive income.

Contact us today at (03) 9847 7689 to invest in the PSA Private Credit Fund and enjoy strong returns that support your lifestyle.

Disclaimer: The information contained in this document is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs.