How much to invest to get $4,000 a month in dividends?
But the truth is you can get a 9.5% yield today--and even more. But even at 9.5%, we're talking about a middle-class income of $4,000 per month on an investment of just a touch over $500K. Below, I'll reveal how to start building a portfolio that could get you an even bigger income stream than this today.
To generate $5,000 per month in dividends, you would need a portfolio value of approximately $1 million invested in stocks with an average dividend yield of 5%. For example, Johnson & Johnson stock currently yields 2.7% annually. $1 million invested would generate about $27,000 per year or $2,250 per month.
In a market that generates a 2% annual yield, you would need to invest $600,000 up front in order to reliably generate $12,000 per year (or $1,000 per month) in dividend payments.
A well-constructed dividend portfolio could potentially yield anywhere from 2% to 8% per year. This means, to earn $3,000 monthly from dividend stocks, the required initial investment could range from $450,000 to $1.8 million, depending on the yield. Furthermore, potential capital gains can add to your total returns.
Portfolio Dividend Yield | Dividend Payments With $100K |
---|---|
1% | $1,000 |
2% | $2,000 |
3% | $3,000 |
4% | $4,000 |
Currently the interest rate on a savings account is less than 1%, but it is possible to find so called 'high yield' savings accounts that pay 1%, so let's assume you put your money into one of those. $4,000 a month is $48,000 a year, and you'd need $4.8 million in the bank at 1% interest to generate $4,000 a month.
However, the investment amount required to produce the desired income is considerable. To make $2,000 in dividend income, the investment amount and rate of return must be $400,000 and 6%, respectively. If the rate is lower, say 4%, the upfront investment is $600,000.
Dividend-paying Stocks
Shares of public companies that split profits with shareholders by paying cash dividends yield between 2% and 6% a year. With that in mind, putting $250,000 into low-yielding dividend stocks or $83,333 into high-yielding shares will get your $500 a month.
They pay above-average-yielding dividends that grow each year. Enterprise Products Partners (NYSE: EPD), NextEra Energy (NYSE: NEE), and Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP) stand out to three Fool.com contributors for their incredible ability to pay dividends.
- Invest in the Best Dividend-Paying Stocks: Choose a mix of stocks with stable dividend yields, ensuring a steady income stream.
- Explore Dividend-Oriented ETFs: Exchange-traded funds (ETFs) focused on dividend-paying companies can provide efficiency and diversification.
Who pays highest monthly dividends?
- AGNC Investment – 14.8% AGNC. ...
- Oxford Square Capital – 13.7% OXSQ. ...
- Ellington Residential Mortgage REIT – 13.2% EARN. ...
- SLR Investment – 11.5% SLRC. ...
- PennantPark Floating Rate Capital – 10% PFLT. ...
- Main Street Capital – 7% MAIN. ...
- Gladstone Investment – 6.9% GAIN. ...
- Pembina Pipeline – 5.4% PBA. Pembina Pipeline Corp.
- 16 Proven Ways to Make $3,000-$4,000 Per Month in Passive Income. ...
- Own Rental Property Empires. ...
- Invest in Dividend Stocks & Funds. ...
- Launch a Supplement Brand. ...
- Syndicate Real Estate Projects. ...
- Launch a Membership Community. ...
- Build an Ecommerce Store. ...
- Invest in High Cash Flow Multifamily Properties.
Best of all, some of these steady dividend stocks parse out their payments on a monthly basis! If you're looking to generate $300 in super-safe monthly dividend income, simply invest $32,000 (split equally, three ways) into the following three ultra-high-yield stocks, which are averaging an 11.28% yield.
Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates. The payer of the dividend is required to correctly identify each type and amount of dividend for you when reporting them on your Form 1099-DIV for tax purposes.
There are a couple of reasons that make dividend-paying stocks particularly useful. First, the income they provide can help investors meet liquidity needs. And second, dividend-focused investing has historically demonstrated the ability to help to lower volatility and buffer losses during market drawdowns.
For example, if the average yield is 3%, that's what we'll use for our calculations. Keep in mind, yields vary based on the investment. Calculate the Investment Needed: To earn $1,000 per month, or $12,000 per year, at a 3% yield, you'd need to invest a total of about $400,000. Calculation: $12,000 / 0.03 = $400,000.
At the current Treasury rate of 4.3%, a $1 million portfolio would generate about $43,000 per year, or roughly $3,500 per month. With your Social Security payments that would generate about $6,000, again enough to live comfortably in most places.
- Peer-to-Peer Lending. Peer-to-peer lending platforms have gained popularity in recent years, offering individuals the opportunity to lend money directly to borrowers. ...
- Rental Properties. ...
- Dividend Investing. ...
- Create an Online Course. ...
- Build a Niche Website.
You can generate monthly income from 100k by investing in a mix of assets, such as dividend-paying stocks, bonds, or REITs. Depending on the assets you choose and their performance, you may expect to yield a monthly income ranging from a few hundred dollars to over a thousand dollars.
How can I earn $10,000 in annual dividends? — By investing in dividend stocks and REITs, with a $200,000 initial investment and finding a stock that yields 5% annually, you can generate approximately $10,000 in passive income.
How to passively make $2,000 a month?
- Try out affiliate marketing.
- Sell an online course.
- Monetize a blog with Google Adsense.
- Become an influencer.
- Write and sell e-books.
- Freelance on websites like Upwork.
- Start an e-commerce store.
- Get paid to complete surveys.
Company | Dividend Yield |
---|---|
Dynex Capital, Inc. (DX) | 12.67% |
Medifast Inc (MED) | 12.09% |
Civitas Resources Inc (CIVI) | 11.38% |
Pennymac Mortgage Investment Trust (PMT) | 11.35% |
Stock | Market capitalization | Dividend yield |
---|---|---|
Gladstone Capital Corp. (ticker: GLAD) | $483 million | 8.6% |
Cross Timbers Royalty Trust (CRT) | $104 million | 11.1% |
Dynex Capital Inc. (DX) | $726 million | 12.2% |
Horizon Technology Finance Corp. (HRZN) | $454 million | 9.7% |
Symbol | Name | Dividend Yield |
---|---|---|
CYA | Simplify Tail Risk Strategy ETF | 101.03% |
NGE | Global X MSCI Nigeria ETF | 85.38% |
TSL | GraniteShares 1.25x Long Tesla Daily ETF | 80.99% |
KLIP | KraneShares China Internet and Covered Call Strategy ETF | 65.57% |
- Exxon Mobil XOM.
- Verizon Communications VZ.
- Philip Morris International PM.
- PepsiCo PEP.
- Altria Group MO.
- Bristol-Myers Squibb BMY.
- Medtronic MDT.
- Gilead Sciences GILD.
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