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One of my novelty goals in life is to have $10,000/mo in pure, unadulterated, beautiful passive income
And one of the ways I plan on achieving that is with dividend stocks
So I’d thought it be cool to share with you my investing strategy that I’m doing right now for 2019 to build up to this long term goal of $10,000/mo in passive income
NOT FINANCIAL ADVICE.
What stocks am I investing in
Therefore, even tho there are individual stocks with super high dividend yields, meaning they pay you more in dividends, I don’t want to have to check up on them on a regular basis to make sure they’re still a good investment
Enter dividend ETFs (exchange-traded funds)
With dividend ETFs, you get all the benefits of ETFs and index funds that we all love (like Graham Stephan talks about in his video on the best investment)
You get the own tons of stocks by just buying one share
Risk is diversified
Stability
Warren Buffet saying the average person should just invest in index funds
Getting higher long term returns than most professional fund managers
Ability to be lazy
But the big benefit for me that sweet, sweet cash flow from the dividends
What is a dividend? Dividends explained: when typically established companies have steady growth so they pay out left over money to investors and shareholders
Normal index funds are great, but if you want to have hard cash to use, you have to sell some shares
With dividend index funds, consistent cash coming in typically every quarter on top of appreciation
(at least the ones I have aren’t monthly dividend stocks)
You can spend that money like regular income or reinvest it (dividend reinvestment) to have it compound ontop of eachother
Here are the dividend stocks in my dividend portfolio, they are NOT dividend growth stocks or am I following the dividend growth model or doing dividend growth investing or dividend discount model or value investing model
These are my top and best dividend stocks and make for great dividend investing for beginners if you’re wondering how to invest in dividend stocks
Follows the popular 3 fund portfolio strategy except with dividend ETFs
VYM 70%, VYMI 20%, and VBTLX 10%
VYM: Vanguard High Dividend Yield ETF
US high yield dividend stocks
70% of my stock market money goes in here
3.25% dividend yield
Meaning $10,000 would bring $325 per year in dividends
Dividends come quarterly
Average 7.70% yearly appreciation
VYMI: Vanguard International High Dividend Yield ETF
International high yield dividend stocks
20%
2.94% dividend yield
Dividends come quarterly
Average of 10.13% yearly appreciation, still pretty new though (2016) so could go down
BND: Vanguard Total Bond Market ETF
U.S. investment-grade bonds
10%
Not a dividend ETF, but this way not all of my money is in the stock market, a little goes into the bond market
Average 3.99% yearly appreciation
And once I put money into these ETFs, I plan on keeping it there for pretty much the rest of my life
So to get $10,000/mo or $120k/yr coming in, with an average 3% dividend yield, I’d need a little over $4m in dividend ETFs
That’s a lot of money
So instead of just putting all of my money into dividend stocks, a portion of my savings will go into a savings account for other investments that could bring me a lot more than 3% dividend yield
It just won’t be as passive, which I’m okay with
The rest will go into this dividend portfolio
So here’s my strategy from start to finish
After all my expenses which are mostly necessary expenses, I put the rest of my income, no matter how much it is into savings/investing fund
80% goes into an Ally savings account that pays 2.2% per year
Active investments, business, real estate in the future
20% goes into my dividend fund which we just went over
VYM 70%, VYMI 20%, and VBTLX 10%
#dividendstocks #dividends #investing
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Copyright © 2019 Jake Tran. All rights reserved.
DISCLAIMER: These videos are for entertainment purposes only. This is not meant to be financial advice. Please always do your due diligence and never stop learning. Best of luck!
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