Low interest rates are making it almost impossible to purely live off cash in the bank. A maximum of 3% just isn't going to cut it.
I think the best way to generate income is by investing in dividend-paying shares.
Here are four of the best options in my opinion:
Australian United Investment Company Ltd (ASX: AUI)
Australian United is one of the largest listed investment companies (LICs) on the ASX. It's been running since the 1950s and its only job is to invest in other shares and generate investment returns for shareholders.
This LIC focuses on the large caps of the ASX, some of its top holdings include Commonwealth Bank of Australia (ASX: CBA), BHP Billiton Limited (ASX: BHP) and Wesfarmers Ltd (ASX: WES).
It has maintained or grown its dividend every year since 1992. It currently has a grossed-up dividend yield of 5.73%.
Arena REIT No 1 (ASX: ARF)
Arena is one of the largest real estate investment trusts on the ASX. It has a focus on childcare centres but also owns some medical buildings.
Both of the sectors it owns property in are growing, which is a good sign. Arena has been thriving, with the distribution growing at around 10% a year over the last four years.
Arena is currently trading with a trailing distribution yield of 5.36%.
WAM Capital Limited (ASX: WAM)
It's hard to look past a WAM LIC on an income list. WAM Capital is the largest LIC run by Wilson Asset Management.
It focuses on buying smaller growth companies at a discounted price that can beat the market. WAM Capital is also not afraid of holding high levels of cash when the time is right.
WAM Capital has grown its dividend every year since the GFC. It's currently trading with a grossed-up dividend yield of 8.71%.
Crown Resorts is one of Australia's largest entertainment and accommodation businesses. It's best known for its Melbourne and Perth complexes which are key city attractions.
The Crown share price has declined significantly because the number of VIP gamers playing has heavily reduced due to new Chinese laws. This could be a temporary slowdown, which is why the committed annual dividend per share of 60c could be an attractive proposition.
Crown is trading with a partially franked future yield of 5.14%.
Foolish takeaway
At the current prices, I think all four would make good long-term dividend investments. WAM Capital will probably provide the best dividend income but there may be a better time to buy it later in the year.
