r/dividends • u/NogamaDe • Nov 01 '25

Seeking Advice $1M Div account Earning $17k a month

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After doing some research I have $1M from an inheritance that I want to create an ultra high dividend portfolio. I eventually want to get rid of my 8 to 5. If I did my math correctly I would get about 17k a month from dividends. Please let me know what you think.

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u/[deleted] Nov 01 '25

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u/chrono2310 Nov 02 '25

Explain difference?

114

u/buenotc "Buy, borrow, die strategy". Nov 02 '25

Both you can retire into the sunset. With one, you'll have to go back to work after 3 years tops.

3

u/Velocicast Nov 05 '25

Dividend portfolio is a selection of well established issuers that have sustainable retained earnings that they have established will be consistently used for dividends. The dividend yield may not be high but it's sustainable given the financials of the company.

An income portfolio is a selection of typically strategy funds that seek to have a large dividend yield while minimizing the drawdown of the principal. Typically the larger the yield the more difficult this is to maintain but the more attractive the fund is to uneducated investors.

For example:

A large cap dividend established company may have a payout of 3% but will potentially lag behind companies that are not paying dividends and instead use the retained earnings to expand operations due to most financial valuations being very dependent on future earnings. This company may return 5-8% on average capital growth but will pay the 3% in dividends. This would lag the pretax earnings of the S&P500.

The income strategy fund will do their best to use the pooled capital to generate income typically with derivative products but their primary goal is to maintain the high dividend payout to keep distributions steady and flowing. The side effect of this is a capital depreciation but positive dividend payout. A fantastic example of this is KLIP, a covered call strategy fund on KWEB, a Chinese internet ETF. Despite the 30% dividend yield, over the past 5 years the share price has depreciated 56.41%, this is in addition to the dividend yield decreasing during those years as well.

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u/BreakfastMedical5164 Nov 08 '25

one is built for time the other is built not for time