Living Off Dividends - $40,000 per year!!
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- Опубликовано: 8 сен 2024
- Living off dividends and financial freedom from dividend investing is such a huge accomplishment. Here is the math to learn how you can live off of dividends and have passive income fund your early retirement. Best dividend stocks for passive income have great dividend yields!
#passiveincome #dividendstocks
*not financial advice
This is why millionaires can make so much money because they play with big numbers
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@@NolanGouveiaSo is it better to invest 400k into dividend to retire in 15 years or the s&p500
Neither bro. Make a DIVERSE portfolio, never invest in ONLY 1 single thing. Thats the most stupid move ever.@@Gsxrsquid831
Well yes kinda like obvious money makes money
3% from 100 = $3
3% from 1.000.000=$30.000
If you are rich its easier to get even more rich
@@Gsxrsquid831Best to invest in the S&P while you have income coming from your job since you can expect a 9-11% annual return over the long term. When you're ready to retire and live off the dividends you can sell it off at a good time and invest it into safe higher yielding dividend stocks paying 4-6% annually.
The S&P is best for growing your money while high yield dividend stock share prices typically don't appreciate that much but the dividend gives you consistent income.
This is my goal so I can be a stay at home wife and mom. The economy has gotten so bad that both parents have to work to make ends meet. If I can make enough from dividends, I can stay home in the future when I have kids ❤
Great planning ahead! I'm getting into this as a 37 y/o mom of 2. Going to dedicate my AuDHD attention to this for the same reason. Best of luck! ✨️✨️✨️✨️✨️✨️✨️✨️✨️
You only need to invest 3 million dollars into AMEX stock to live off of dividends. You'll get there sweetie, one day eventually.....
Be pretty and a good person. The right man will do the rest
Yeah all you need in 3million so by the time you are 65 you are ready to have kids and settle down
It's also important to note that the higher the yield and the less shares you need, the higher the risk! Also the price of the shares fluctuates and so will the yield 💯
10 years of compound interest make a huge difference. To live off dividends forget about getting money out of the broker and instead reinvest all the dividends for at least 10 years so the machine can make its own gas 📈📈📈
Isn't that what growth companies do anyway? Reinvest the profits back into companies
it's not interest
My payouts go to the bank . How can I get it to go to buying power????
@@lawandabrown1595 you need to change the withdrawals settings at the broker
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It definitely works. Has for decades. Once you have enough capital.
Just to be honest, i'm still going to work my butt off and still invest into dividends regardless. The more money, the better lol.
As you should!
Same here. But my reasoning is I want to keep myself grounded. That and I wouldn't know what to do with myself if I didn't have a job.
I’ll give you a free hint tho! You can borrow 1M faster than you can work for it 😅
Who would give you a million dollars without a return? No one@@BillionaireByBirth
@@whatever7240Exactly I'm the type of person who likes to keep busy. I work in an office for the state and I enjoy the clerical work but in this economy having multiple streams of income is necessary
I've come to realize that money is a tool. I’ve worked so hard over the years to realize that if you don’t make money work for you, you can’t experience true freedom. My retirement goals haven’t been met yet though
Chill, that's not True Freedom. Real freedom isn't tied in with money. I felt free when I was poor. You can say financially freedom, but actual Freedom isn't connected with money. Flow through this world freely and with confidence.
If your not happy with out it you won't be happy with it $$$$$$$
@@UltimateQballI don't know about that one. How you can be free and poor at the same time? In this world you need money as a resource to make things happen for yourself and to help others that's just the reality. Unless you want to live off the grid
@@marklouis1890 Money isn't the highest order.
Age 26, already retired. Thanks to stocks and dividends.
Awesome!
What’s the secret to get to that point ?
save a shit ton lol@@Malitubee
@@blblawhoo4338Your money loses value in a savings account. When you are rich, your money works for you.
Love this man, well done!
Or you just take your dividend goal and divide it by the yield. Much simpler. 40,000 / 0.0135 = $2,962,962.96
Yessir
Thanks, however if the Div is monthly vs quarterly it also has to be considerate.
For Rio, you actually need about $580,000 to receive $40k
But couldn't you just use the payout to plug it back into your stock?
I plan on buying 10 stock for 10 months then 50 stock for another 5 and then 100 stock and so on.
Once it's a big enough pay out I'll diversify
@@simonbelmont1986can u explain this a little better and are u actually doing this?
@@simonbelmont1986it works if you have a decent chunk to play with. The less money you have the less options you have. For some, like me, all i have is compound interest to get to a point where i can then play with dividends
Checked that myself. This video is 2 years old - the dividend for RIO is 6.83% as of 8/27/24 or about half of the figure shown here.
Or yield max like TSLY or nvdy put 60k and 150k into stocks like Schd or voo for more growth to balance out the erosion of TSLY /nvdy. You’ll get about 25-30k on it and 15-20k on the voo/Schd. The capital gain from voi/Schd should offset. Gotta have decent risk tolerance
Guys, please do your research about the reality of dividends before investing in it and believing it will make you rich. You need to grow a big capital first and there are many drawbacks to dividends, it's not free money at all since you already possess that money. Personnally I think it's not the best way to achieve your financial goals. Good luck!
Yup! You'd need $3M to make 40k a year off $1.89 dividends. A little misleading title, but the idea is there.
Everyone think it’s free money because you get paid cash. It’s a pretty good safe investment as most dividend yielding companies are ”boring” companies that will never go out of business. But if you’re smart you would just reinvest the dividends into the same/other stocks. Which leads to you the question: why would you not go for pure growth instead? I’d say if you have patience/if you’re young you’re better off just investing in something like an SP500 or QQQM ETF, and if you’re interested in the ”cash part of it” then just sell some once you’ve made a few %. If times are rough you’re normally better off parking you’re money in money markets, as it will guarantee you’re not eating the fall of the stock, and you’re getting a fixed % of cash flow every month.
I anticipate positive growth in the markets for 2024, and I'm considering investing $220k in stocks for my retirement plan due to recent rate cuts. Could you provide guidance on executing this investment safely? Additionally, are there any crucial tips or changes I should be mindful of in the current financial landscape?
Fantastic! That sounds wonderful. How can I get in touch with your financial supervisor?
thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
Ya know I been teaching myself ratios and reading up on every stock that I’m interested in. (I’m not a financial advisor so don’t take my words as fact) but holy crapola the potential for this year is nuts. Technology has gone through a gauntlet these past couple years with all the big stuff that’s happened and this year a lot of companies are introducing new stuff. AI cookies is one I’m interested in because of advances in advertising. Online shopping is another one. Other AI stuff like work robots, online chats, customer service bots, etc etc. The potential there is insane. The stocks are either fairly undervalued OR just BARELY overvalued. Just waiting to skyrocket when the company puts their new tech into motion. Also another thing ( not super excited, cuz my little bro is active duty in the military) but war stocks. Companies that support the war. Specifically new deals that the military is making. Like new service rifles for example. Unfortunately I don’t think we can invest in that one yet, and I imagine it makes sense. The government probably doesn’t want too many rando people owning their gun supplier. Also the gun supplier probably gets enough funding as is😅. But those stocks are something I’ve been keeping an eye on just because I’m watching the turn of tides very carefully. Nuclear power is another war stock to watch. This one you can invest in. So far mine is pretty healthy and the ratios look promising.
In 5 years… I have no idea what will happen. Presidential elections, wars expanding, the antics going on at the Fed Reserve… the risk is NOT low. If I had it my way I’d be stock piling land and remote real estate instead of having such large amounts in stock. But supply/demand and buy low/sell high loosely guides my decisions so no land rn. Part of me thinks that open boarders means more tax breaks for corporations because they can claim employee diversity. I think Biden probably could’ve “helped” his campaign funders in a better way… but it is what it is. If we do go to war though, we should have support for the war effort back at home. Kinda dark outlook on it, I apologize, and I hope I’m wrong, but it’s something to watch. I still agree with you that 2024 will be a WILD year for the market. The tensions are so high and it looks like the market can only go way up. Of course the opposite is possible as well. I wish you all the best of luck, and please do your own research and educate yourselves. Reading articles that say “this is the best stock to buy” typically turns out to be a bad idea once you run the numbers yourself. Money is a tool, and a hell of a lotta people use it for their own benefit. Not yours. Formulate your own opinions based off solid evidence that you find yourself. And make sure the data you use is as current as possible 😂 good luck to anyone who finds this comment
SCAM ALERT
Also the higher the yield generally the more risky the asset. Should probably mention that..
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My goal is only 7k-10k in dividends. I want my dividends to cover my Roth. Then I can take that 7k I save and invest elsewhere.
Exactly what brought me here! I want to live off dividends! ❤
Good luck 😊
Thank you bro !!! I don’t what it is , even though I believe I’ve seen this math before and although I understood the numbers it never quite made sense like it did this time with you explaining it …🙏🏾🙏🏾 thanks again man !!
I’m still going with growth appreciation and the S&P 500 over dividends. SCHD hasn’t kept pace.
Step one: have multiple millions of dollars
Just take the growth rate into account. And the high yield traps.
Don't go for high yield but instead go for growth stocks that raise their dividend. This way that number of needed stocks will drop drastically.
Rio tinto paid a special dividend so it’s not really that cheap to live off rio
True!
Last time I looked I belive it was at about 7 percent yield
They did indeed! Well informed! 4-6% is a really realistic high end of dividend earnings!
How safe is that yield though?
@@jordandurkin12375% annual or thereabouts
Oh cool I only need 2mil to start
That’s not true. 90k would get you 1200 a month in dividends
@@BigcountryReactionsdamn might as well be 2 million
@@BigcountryReactions which dividends?
buy dividend stocks under 15$ this is the only way 4 an average man to win..
The commercial for Rio Tinto
BHP is better 😎🤙🏼
Why not just divide expenses by div yield percentage like it says in your graphic. Gives you the same exact thing and is quicker.
I love so much this person ❤❤❤❤🎉
My portfolio is over all yield is right at 4% it was higher but I bought into Amz, goog and Tesla for the spilts so it brought my yield down about 1.2 %
I like it!
Stock split is completely irrelevant. You bought into those companies for a pointless reason that has zero impact on the value of the stock
@@Kennan_Davis I understand splits are irrelevant, my point was my portfolio yield on dividend returns, I could of invested that money on O, Jepi or any other stock that pays a dividend, however my goal is to have 100 shares of these companies to do option trading.
@@f.w.1318 The number of shares you have is irrelevant just like stock splits. The only thing that matters is the amount of money you have invested, not number of shares. Just like dividends (as you mentioned), with regard to the yield, the only thing that matters is the amount of money you have invested.
Number of shares and stock splits means ZERO
There is also the buy borrow die method which a lot of rich people use
The amount to invest in AMEX and Starbucks was so high even he could not bother to say it. Who's ever gonna get to invest 3 million dollars to get 40,000 a year???? Click bait anyone??
Thanks prof G I will have to see this many times till it is understood, I know it’s a valuable formula, thank you so much
Most straight forward money hack that works if you could just deposit that money once
Without listening to the video I can already tell what the solution is. Have tons of money, put them in dividend stocks
That is a pretty solid solution
Is there a particular reason people calculate the number of shares ? I don't really get the difference between owning one share giving $10 per share or ten shares giving $1 per share.
I get $0.03 in dividends from my Apple stock. 😂 I should buy more.
He hasn't talked about diversification
I've heard no more that 3% on any one vehicle
Better 1%
I'd say diversification doesn't make sense if you fully understand the companies you're buying. 1-3% is pretty extreme and the best route is to just buy the S&P if you want diversification with great results.
Easier way is 40,000 ÷ 0.0135=
What’s the 0.0135 comes from ?
@@annajared7535that’s the dividend yield
@@annajared7535that's the yield rate of 1.35% = 0.0135, dividing 40k by it shows the figure close to 3M that you have to possess in the first place in order to invest for a 40k dividend.
@@annajared7535yield
@@annajared7535 that's the dividend yield
Can’t you just divide the goal amount by the dividen percentage to reach the same number? Just saying it takes away an extra step.
As someone who is interested in archieving financial independence , I found this video to be very informative and inspiring
I’m confused I would need to invest the $ amount of stock to get $40,000 a year?
The real number is how many shares you need since price always changes
You need to amount of shares. Dwoending on the share price on the day you buy itll vary
if you ever win the lottery, you should just invest about 80% into 3-5% dividend yield large safe ETF.
let’s say you won $6mil in the lottery… 1mil for you to go crazy with (cars boats) and to give to family (maybe split 300k amongst your family) and 5 mil to invest. at a 3% dividend yield will get you 150k per year in income.
I don’t recommend playing the lottery however ;)
13% yield on the right?! How long did that % last?
How do you invest in dividends and how much do you need to start?
I'll just put it all into tsly
Dividends is a rich man's game no point in learning it if you don't make a lot of money
Love that!
People also need to realize dividends are subject to change.
Tax? Ya gotta pay tax on any income stream. You can minimise it, just not avoid it!
I don't need all that all I need is a guaranteed 10%.
Hello, please how do I start. I'm dealing with a recent injury and I would like to know more about remote and digital income opportunities. Thank you so much
$3,000,000 to live on the poverty wage of $40,000. Sounds great!
If you have $3M why not invest instead in VOO, pay the 22% in income tax, but generate 10% each year in gains?
The result is your nestegg will gain 10% x 22% = 2.2% each year but you will live on $90,000 per year.
Which is better living on $90,000, or living off $40,000?
With VOO, your nestegg will keep up with inflation, with your dividend investing you run the risk of draining down your funds while living in poverty.
You need to rethink living off dividends or speak to a financial professional, not youtube videos.
The purpose of dividends is stable low risk returns, but putting it ALL there makes no sense, atleast diversify a little bit.
Wow I wish I could speak with u man
You are so out of touch if you think 40k is poverty
That's how I do, majority in VOO and I have recently started investing steadily into VYM (a 3.1% dividend fund) as my more conservative investment.
What is voo
@@jamiesucks7994 Ticker symbol for Vanguard S&P 500 Index Fund. Buying it splits your money into all S&P 500 companies.
Is it better to have a Roth IRA or an investment account?
I like ROTH first but definitely both
Can you do that with etfs instead of individual stock ?
Yes!
So I already need to have lots of money in order to make a lot of money
Also that yield your getting is all gonna be taxed at the end of the year keep that in mind
live off those dividends! financial freedom explained!
What if you can only afford $100 a month? :(
@@HackweiserIG you should invest that money into education, so you can get a higher salary and save more
@@HackweiserIGwe all got to start somewhere always better now than never
@@BergesCello sorry buddy I have 2 kids and a masters degree maybe you should do your research on somebody before talking shit.
So in short, why does Rio require so much less than the other two? Is it purely that yield or is the type of company/share play a part?
The yield. It pays nearly 10x more than american express
I'm doing growth and dividend mix
Are there any brokers which will allow me to buy shares using my American Express card? 😎
Heavily doubt it. Normally u need to transfer money from a bank
@@MRkriegs Yeah it's unfortunate cause I'd like to be able to earn rewards and flight points for money spent on investments.
So, you need $3.3mil to buy that many shares. Good luck!
Living off of dividends...
Rockin' all that dough....
Lovin' my retirement...
Then, I'm gone...
On a cruise.
Judas Priest.
Sing it with me, everybody.
Living off of dividends...
The formula is right there !
(40000/yield percent) is your answer.
😅 what a weird way to calculate (the way you did)
Man living the dream, congrats!
Can I start investing as 9 year old but my mum has a account for me
Yes look up “custodial accounts”
At 9 Years old you should not make your Life about Money ..
Buy spce 🔥
Me too I DONT UNDERSTAND. SORRY IM NEW
Doesn’t say how many stocks only the value! Would be nice to have a number to go for lol!
I’m lost so is 40k what need to be invested into the stock or is that just what you estimate to live off of for a year ????? I’m just tryna make it out the hood 😢
40k is what they want to live off per year.
To get that amount in dividend income they need $2.9m or American express.
Different stocks paying different dividend percentages will change this number.
In his example he needs to buy $291k of RioTinto to get $40k of income a year.
This is a gem!
🙌🙌 thanks
Bro literally uploaded a tutorial for calculating percentages, this is fifth grade maths at most...
Only for the rich millionaires and billionaires, don’t waste your time researching this.
Lol 😂😂😂
If I had $60,000 to invest How can I get a monthly check from that for the rest of my life!??? What are the steps ?
Thanks for this bro
Did you minimise taxes?
Yeah He did Taxes are a thing and Growth will only take when you sell some. Dividend is every time. Both are good to have.
Starfish!
Or you can just put those dollars into bitcoin for ten years and use it as a savings account and hedge against inflation.
Im rolling dividens into more stock in my ira my trading account has no dividens nore do i fund it as mucu as the ira
So if I had 1626000 to invest into dividends why not just use that money and buy real estate, let's say 10 four plex newly buit...50,000 down per fourplex...grossing conservatively 2000 per 4 plex per month cash flow...240,000 cash flow yearly...nowhere near the 1 million to get 40000 yearly....am I missing something? Please correct me if I'm wrong
Ease. You can get whatever shares you need in like 2-3 days round trip. Then you go on about living your life. No property manager no hassle outside of market movements. Assuming you've been in the market 10 years or so to aquire the capital you should be sleeping great at night.
Dont know about living off 40k put with a full time job on top of that you will be doing all right for sure
wouldn’t it just be easier to keep you’re money in 10 HYSA’s at 5% which they are now? $2.5M brings you in $125,000k and you really have no risks since the FDIC insures $250k? that’s just me though.
read news stories about people getting their bank accounts drained by scammers. Wells Fargo, Chase, etc.
Why invest in stocks with 2.5% dividend yield instead of just investing into a guaranteed 4.5% APY High-Yield Savings account? Wouldn't you make more money using a savings account? Just wondering and asking for an answer. Thanks!
Great question. This year in late 2023, interest rates on high yield savings accounts are incredibly high so this makes total sense but normally even the “high yield savings accounts” have a yield of like 1%. The rate is very variable so in that case the dividend at 2.5% would be the best move
@@NolanGouveia Thanks! This makes sense. So saving accounts interest have been very high lately! Up double if you think about it!
Interest on that is taxed at normal income, where most stocks issue whats called qualified dividends at a greatly reduced tax rate....and then you still have the normal appreciation of the asset. High yield savings are GREAT for your emergency fund though
very convoluted way to calculate it. no need to work out the number of shares. just divide income required by the yield as a decimal. or more sensibly get the yield of a nicely diversified portfolio and use that rather than this 1 stock.
I would never invest in single stocks. Thats stupid. Better to invest in S&P 500 Index funds or ETFs.
What's Rio Tinto in red looks like it's the best by far?
Rio Tinto doesn't show that percentage for me on Robinhood. 6.55%
What would SCHD be? Or VOO or QQQM?
Rithm paid me $60 month for 2k invest . Debating on dropping 20 to 40k in it after the next real estate crash
Is that $60 from dividends? I’m Interested in Rithm debating on investing 2k now or wait a month or so for it to drop some @marlonsmith713
I just bought different reits … that way if one or two goes down it won’t hurt so bad
So basically you can make 40k a year in dividends if you own that amount of stocks?
I am confused if I invest $50000 and I take payments quarterly the first quarter would be $3000 if it was 6 percent . now are dividends only paying that 6 %for the entire year and dividing it up between the quarters or do I get 6% every quarter?every quarter would go up in price if I reinvested .if it paid 6% every quarter instead of the full year.
So lets say i wanna get 15000 annualy from example just SCHD that has 3.61% i would need about 38 988 Shares x stock price of the current price for schd right now is about 72$/share??
Just divide $15,000 by the dividend yield (0.0361) which will give you about $415,000 needed to be invested in schd
What are good dividend stocks
Check out my longer videos on some of my picks
Lowes, mc Donald’s , axp, If you want etf go voo, vti, dgro Schd
Thank you
I’ve always been so cautious about investing into stocks, crypto or real estate. My biggest weakness is doubt, I’m so doubtful it’s becoming sickening, I had the opportunity to invest $450k into crypto in 2014, I was so scared that I could lose it all, because I took financial advice from the wrong people. considering the current bitcoin price today
I could have had about $11,550,000 sitting in my portfolio.
I can’t even remember what I spent the money on lol, I have the opportunity to invest again and I’m not wasting it. coming here to seek financial advice might be illogical but I’m receptive.
Bitcoin might not be the best option at the moment, so where can I put $250k at the moment?
You didn’t include 30% tax bracket for dividend income
Great break down!!
Thank you for watching!
@@NolanGouveia So I have to invest 2.9 million to make 40k a year?
Or 75000 dollars for your total investment in yoeldmax etfs. There’s some risk but at least you dont need 2 million. Your money will double every 21 months if they maintain the average payouts. This is the fastest way to do it right now as far as i can tell. But hey, do whatever you want right?
Why not just use non-dividend stocks and sell some when you need money?
You can do that
thanks so much for putting visuals with the math equations!
You’re welcome!
How much would you have to pay in tax on that 40K?
It depends how much other income you make. If that’s your only income then $0! But if you make over $41,000 then it’ll be 15% tax
Or Roth IRA and it’ll be free when you’re retired
you need to be a millionaire to live off your divi's.....if i had millions i wouldnt need divi's
Dont bother with dividend investing unless you have millions
🤔
No, start small and grow over time. 10 years or 20 years of saving and buying dividend stocks adds up to a small fortune.
Benjamin Graham rolling in his grave at a theoretical portfolio like this potentially guiding real-world financial decisions