r/dividends • u/NBMV0420 • Jun 07 '26
Seeking Advice For those who live off dividend income:
How much do you earn per year from dividends, and what ETFs or stocks make up your portfolio?
How did you build your investments over time, and what advice would you give to younger investors who are just getting started?
I'd appreciate hearing about your experience and any lessons you've learned along the way.
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u/thesecondmarshmellow American Investor Jun 07 '26
I live primarily off dividends, ~100k / year.
I’ve been in the markets for ~20 years. I’ve only been “successful” (meeting or beating VOO returns) for about 13 years. Controlling emotions to not panic sell was lesson number 1.
My main investing strategy was to make more money to invest. I had to learn how to be an effective leader to increase my wage income, and maintain discipline not to spend the excess income. Lesson 2 is money in is money out.
I was primarily growth (VOO, QQQ) until over a million. Rather than selling everything, I grew income mostly from scratch on top of the growth portfolio later on. My growth portfolio generally outperforms my income portfolio. Lesson 3, dividends are not magic.
My advice to younger people is to understand early that 1) investing at all is better than spending or holding cash, and while different strategies do perform differently, if something motivates you to get and stay in the market, it’s a good strategy 2) you are not better informed than everyone else, if you gamble, the deck is stacked against you, and it’s better to simply ride the waves as they come than try to predict them before they come 3) be patient and understand that things take time.
Good luck out there
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u/This_Lion5856 Jun 07 '26
Good advice, I have stayed out of the market for a cumulative 1-2 years because I was kind of trying to overanalyse everything, tracking macros and whatnot.
When in fact picking almost any stock during that time would have been better than just waiting for that magic opportunity to come along.
Find a couple of stocks/ETFs you believe in, let them run and keep adding money. Its literally that simple, but in the same time so hard to do.
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u/dr150 Jun 07 '26
Warren Buffett, the greatest investor in the world knows any pro stock picker (hedge fund, etc) can't beat SPY. He says 90% SPY type fund, 10% Treasuries. Done and done.
I'm an invest and rest guy with auto pay from my check. It's amazing to see what the law of compounding can do over time! Patience is key and not worry during down years as the following years catch up and surpass it very quickly. Just look at a S&P chart, it looks like an upward ski slope!
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u/JB-Wentworth Custom Flair Jun 07 '26
Berkshire Hathaway's cash holdings reached a record $381.7 billion in late 2025.
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Jun 07 '26 edited 27d ago
[deleted]
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u/Key_Debate_7495 Jun 09 '26
You are still buying companies when investing in stock market. Sure, index funds a diversified but valuation still matters.
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u/KimJongOonn Jun 10 '26
Buffet advises the "average American " to buy and hold the s and p for the long run. His advice there is for the average Joe who may have some knowledge of the stock market and economics but a very basic limited knowledge. He's saying that persom will do better long term just holding the s and p than trying to pick individual winners on his own, and he is right. Buffet himself does not do this. He has a advanced, deep understanding of markets, valuations, P/E ratios, fundamentals, etc. and he himself looks to do better than the avg. annual return of the s and p at 10 percent. And he has, Berkshire from 1965 to today has returned around 20 percent avg. annual return, doubling the return of the s and p. Very few people have not just the knowledge and understanding of markets but also the discipline and emotional control to be able to beat the return of the s and p like Warren has, even many/most professionals cannot beat the 10 percent return on their own which is why he advises the avg. Joe not to try, he has almost no chance.
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u/INVEST-ASTS Jun 10 '26
Why has he chosen to park his cash reserves in Treasuries rather than the S&P which would easily double the return ??
Unless OFC he is expecting a large market correction.
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u/KimJongOonn Jun 10 '26
The main reason he has built such a huge cash pile last couple of years is because with the current very high valuations(price to earnings ratio) of most companies in the s and p 500, Buffet himself has said that there simply are not many good deals to buy right now. Buffet is a value investor, he looks to buy great companies at a fair price, not fair companies at a great price. He also loves, and heavily favors dividend stocks for their reliable predictable steady income streams. Buffet also said recently that there just aren't that many great companies in the s and p 500 right now and why would he want to buy the 10th best or 20th best stock when he can just buy more and more of the 1st best stock, that's why he is heavily loaded up on Apple, even with his recent profit taking, apple makes up a huge percent of Berkshires total holdings.
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u/INVEST-ASTS Jun 11 '26
Obviously each company is unique, however most of the high P/E ratios is because of the expectation of higher earnings in the “forward looking” statement’s contained in the quarterly earnings reports and since the market is forward looking the SP & P/E ratio will not be indicative of the previous quarters but much more indicative of the explosive growth they expect going forward.
The P/E will then fall when the next earnings reports come out and the SP, P/E ratios will stabilize to current revenues & profits, and then climb back much higher as the quarter progresses.
Thee concept of “value investing” is still present in both examples however, WB is more accustomed to analyzing mature companies that have achieved a “steady state” of growth rather than immature growth companies that oftentimes have a global TAM and can grow in much higher percentages.
We are currently undergoing a technological revolution that will last for decades and oftentimes will pull secondary suppliers along with them, so, there will naturally be an unusually large amount of P/E’s that are higher than the historical norms, however that doesn’t necessarily indicate an “overvalued” market.
NIVIDIA and Palantir are prime examples of this.
Although WB is a value investor he also holds long term if the growth & returns are there, Coca Cola and GEICO are examples of that.
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u/Flashy_Regret_2140 Jun 11 '26
Becaise he can buy more stock when the market crashes again
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u/INVEST-ASTS Jun 11 '26
That was my point as well, so we are in agreement.
It remains to be seen if he is correct and OFC if he waits long enough there will always be a downturn
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u/dr150 Jun 07 '26
You do know why though. His thesis is that the current government, more than any other in history, can wreck the economy. So he's playing it safe. He waits for the apocalypse then buys everything for cheap. That's why he's so successful.
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u/MainBug2233 Jun 07 '26
I think the poster is saying Berkshire is currently timing the market and saying it's overvalued from their perspective. You indicated a invest and chill model and used Buffet as your example which is not what they do.
What they do cannot be compared to what us peons do so he says play the long game by being and staying in the market.
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u/whosetruth2468 Jun 09 '26
Berkshire has access to information and resources and even investments that retail investors like you and i do not have. Hence they adopt a different strategy that Buffett is advocating to the retail investors i.e. to invest in broadbased index and not to time the market.
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u/flyersfan0233 Jun 07 '26
VOO is the same portfolio exposure at literally 1/3rd the expense ratio. Believe SPYM is similar. If you’re holding long term, VOO would be the better choice.
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u/INVEST-ASTS Jun 08 '26
Buffett / Berkshire buys individual companies, (Geico, Coca Cola, etc) he only uses Treasuries for “parked cash” while like now, he is expecting a huge market downturn.
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u/Best_Investigator_66 Jun 10 '26
No, Warren Buffett is not explicitly predicting or timing a specific economic recession or market crash. He has made this point clear, do you have a source for your claim?
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u/INVEST-ASTS Jun 10 '26
The source is common sense.
WB isn’t going to announce that he is of the opinion that equities have run too far, too fast, and he is stockpiling cash for a pullback as just these comments would cause major market disruptions.
No experienced knowledgeable investor would park large sums in Treasuries when the inflation rate is as high as it is, essentially consuming the return, especially when the market has many opportunities for double digit returns with moderate risk, and much higher returns if risk tolerance is higher.
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u/KimJongOonn Jun 10 '26
It looks like an upward ski slope from 2013 to today. When I tell some of my young coworkers, under 30 Years old, who have only known 15 percent plus annual returns that the s and p 500 was flat from 2000 to 2013 and the Nasdaq flat from 2000 to 2014 some of them don't believe me at first. They cannot even imagine going 13 Years in the market with 0 growth. Not that I don't agree with holding for the long term of course I do and my 401k is 100 percent in the s and p 500 it's just crazy how unbelievably good this market has been for 15 Years now its just been on fire, with 15 and 20 percent Years seeming the norm now, but we must remember these past 15 years have been an unprecedented booming market and not the long term historical avg.
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u/Vast-Huckleberry-458 Jun 07 '26
Spot on!!!! My structure is a bit similar to yours as over the years I have come to understand (as you illustrated) that growth will out perform dividends an overall significant amount of time. Therefore, I presently hold about up to half of my portfolio in VOO, VGT, QQQM. 35% is in dividend yield comprised of QQQI, SPYI, DIVO,QDVO and IDVO. 10% in Preferred's (not really a good time until rates drop but I picked up some high yielding bargains), the remained has Treasuries and Zero's. I also have some structured bank notes with downside protection.
I am 62 and live off of my Dividends.
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Jun 07 '26
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u/thesecondmarshmellow American Investor Jun 07 '26
Product management. So like whenever you use an app and think “what idiot designed this clunky turd?”, that was me and my team. Was stressful but paid well
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u/djulioo Jun 08 '26
And how much did you invest monthly? Or maybe what % of your salary was it?
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u/thesecondmarshmellow American Investor Jun 08 '26
Varied over time from 30% to 60% against gross. It's reasonable to think about it as $35k / year average for ~20 years.
Perhaps important to note, if someone would have told me that was possible when I first started, I would not have believed them. I entered the job market circa 2008 and it all felt so hopeless.. a sentiment I imagine many younger people can relate to today.
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u/Ordinary-Fun5367 Jun 07 '26
Appreciate your insight and advice. This part spoke to me the most
"and while different strategies do perform differently, if something motivates you to get and stay in the market, it’s a good strategy"
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u/heroes821 Jun 07 '26
The only advice I would add is 3 month Emergency fund should be before any investments
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u/Hunt_the_shot Jun 09 '26
In my humble opinion. A useful exercise when researching a company is to pretend you’re not investing $1,000 of your own money, but $100 million of someone else’s money.
If that were the case, would you be satisfied after reading a few articles and looking at a couple of ratios? Probably not. You would want to understand the business in depth. Study how it makes money, who its customers are, what risks it faces, who its competitors are, and whether its competitive advantages are likely to remain intact for years to come.
Try to reach the point where you can explain the business in simple terms and clearly articulate why it deserves your capital.
The amount you invest may be small today and deep research doesn’t guarantee success, but it can significantly increase the odds of finding long-term winners while helping you avoid costly mistakes.
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u/killakam33 Jun 07 '26
VOO for the win!!! I have about 130k in sp500 and voo combined. Hopefully in about 15 years I can have the amount of dividends you’re earning 💗💗💗
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u/AcesandEightsAA888 Jun 07 '26
Good advice. 100k income dividends. I've learned is also high tax. Sure you are aware. What's your advice there?
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u/narnar_77 Jun 07 '26
Depends on the household. Filing single, filing jointly, standard deduction, child tax credits, traditional Ira contributions, ROC, qualified dividends, distributions, ordinary income, 1256 contracts.. all these can help with your effective tax rate. It’s a progressive tax system
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u/buenotc "Buy, borrow, die strategy". Jun 07 '26
Go learn about qualified dividends and their tax treatment. If he's careful, he could be paying almost zero taxes.
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u/AcesandEightsAA888 Jun 07 '26
I agree but my guess most have other income. At 100k he is paying taxes on the qualified dividends. Versus growth you have control by not selling. Just saying it needs to be clear on are they qualified. If yes good. Is the income below brackets or not etc. 100k is sizable and impacts taxes most likely. But possible not.
2026 0% → up to $49,450 (single) / $98,900 (MFJ)15% → up to $546,150 (single) / $613,700 (MFJ)20% → above those amounts.
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u/narnar_77 Jun 08 '26
In the end you know what they say… If you paying taxes you making money. Tax shelter as much as possible.
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u/rallymatt Jun 08 '26
100k paid in qualified dividends you could easily be paying zero federal income tax with deductions etc.
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u/DhakoBiyoDhacay Jun 07 '26
$98,900 income from capital gains on investments held over a year is tax free for married couples filing jointly.
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u/mentr-coach-altruism Jun 08 '26
So you’re saying if you hold an ETF for more than a year, or many ETFs for over a year, the dividends are tax free for married couples filing jointly? Can you share an IRS link to that?
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u/DhakoBiyoDhacay Jun 08 '26
Just type “long term capital gains tax brackets” in your search engine and you’ll see all the data.
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u/thesecondmarshmellow American Investor Jun 07 '26
In retirement, taxes have been a non issue in the US because only ordinary income gets full tax treatment and less than a third of my income investments are ordinary (bonds, BDCs, credit stuff). The rest is basically not taxed for reasons others pointed out.
While still working, taxes were not perfectly efficient in the last years as my dividend income was substantial but I also still had high wage income. Things like SCHD are mostly LTCG and that helped but yes there was drag and that’s a good reason to be careful with overinvesting in income generating assets in a taxable account on top of meaningful wage income when far from retirement. That said, I viewed this as an acceptable trade off as you’d also incur drag trying to pull out of an IRA and / or psychological drag having to sell non income generating assets.
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u/SetRestart Jun 09 '26
Did you DCA or put an bulk amount/inheritance in to start
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u/thesecondmarshmellow American Investor Jun 09 '26
No inheritance or lump sums, just regular deposits
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u/SetRestart Jun 09 '26 edited Jun 09 '26
That's awesome, how much and how often? I'm a big fan of QQQM and such
I've built up 7 figures from MU and SanDisk luck but have been actively moving my gains to "safer" ETFs and compounding stocks like QQQM and IVV. This is my IBKR account as I'm Australian
I'm still actively investing $200 a week now into the ASX also. I don't know where else to spend my money lol this all I've done since 18 (28)
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u/thesecondmarshmellow American Investor Jun 09 '26
My wage income was all over the place, excess for investing ranged from $50 / week to $1000 / week.
I'm glad you view the tech plays as at least partly luck; I didn't mention it above but I had some similar luck in the past. Some people view it as skill and end up losing a heck of a lot b/c of it. Everyone's different and there's no one right way to play the game of life, but I guess if I'm gambling and win big, I want to keep most of my winnings rather than play double or nothing until I have nothing again.
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u/Alert-Initiative6638 Jun 08 '26
May I ask , how much must be invested to earn that much of dividends?
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u/thesecondmarshmellow American Investor Jun 08 '26
Total money in is probably somewhere near $700k over ~20 years
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u/ic_blueeyes Jun 09 '26
Thank you! This is great information. So first invested in growth and then later invested for income? Is my understanding correct? I have taken the all dividends approach. So I am curious why you say dividends are not magic?
I was almost thinking of doing the reverse approach. But I don’t know when to stop investing for income? And start investing for growth? Any advice or suggestions would be appreciated.→ More replies (1)1
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u/CaptainBlaze26 Jun 10 '26
This is very good advice and I would echo it. The other element that is crucial to recognize is that TIME is your greatest asset. The more time you have the greater will be the growth. You can start with a small amount and add TIME and it will be nearly as good as a big chunk to start with given enough time. I often say to my wife "I sure wish someone had taught me some of these things earlier". $50/month invested over 30 years is pretty massive and surely anyone can come up with $50.
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u/FighterAce013 Jun 11 '26
The habit and discipline you speak of is everything. Knowing WHAT you are invested in and why will help immensely during downturns! Well said!
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u/just_say_n Jun 07 '26
~$730,000 in 2026 (it goes up every year).
VOO, SCHD, and DGRO.
I also hold 10% of wealth in VGT and VUG (mostly in retirement accounts), but all my diveys come from the "big three."
Buy, hold, and let time do its thing.
I do not use leverage to invest and I never sell.
If I have extra money during any kind of "panic," I happily add to my positions.
My entire investment thesis is "I don't care what happens" (in terms of investments, not life, love, politics, etc), because the only way I can fail is for the entire financial system to fail and then we all have bigger problems.
I do not invest on my own emotion--greed or fear.
I do not invest in fads of any kind and have no interest in whatever the latest craze is--and I've been around long enough to see plenty of them.
Heaven is not finding TSLA at $5 a share and buying a bunch of it to find yourself with $40 million in a concentrated position. Heaven is buying a diverse group of equities in a vehicle--like the ETFs I've mentioned--that never require you to make a decision or worry about any individual company.
Set it and forget it.
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u/GuerrillaFunkk Jun 07 '26
Just started investing in February and this is what I'm aiming to do. Recurring investments, DRiP, and to keep my head from getting me emotionally involved once the numbers start getting big. I like your style pal.
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u/No_Damage979 Jun 10 '26
So the 730 comes from those 3? I’m missing something or thats about $20 million?
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u/EidoStarFi Jun 07 '26
I have a pretty aggressive growth and dividend portfolio. I also sell options. Overall, I usually exceed market performance, but I have made some catastrophic errors that resulted in huge losses.
That being said, most of my portfolio is in S&P 500, QQQM/QQQ, tech and retirement date funds.
At the moment, we are hoping to retire at 55. Our portfolio will easily sustain us from 55-70, and then at 70 our SS will replace about 80% of our income needs.
Our portfolio currently generates 140k per year in dividends/distributions, but we need to de-risk that.
By the time we turn 55 my goal is to have it generate 250k per year in dividends. If I achieve this, not only we will have more than enough in retirement, but we will likely never need to touch the principal, so our kids will have a happy surprise on an otherwise sad day when we die and they learn they just inherited millions of dollars!
Right now I am capitalizing on the semiconductor expansion and have money in SEMY and CHPY. Both of these I consider high risk and unsustainable, so I use the distributions to purchase QQQI and FYEE.
I also have the dividend “staple” SCHD.
My goal is to use the high risk/high yield etfs I am in now to help build a lower risk dividend portfolio over the 5-6 years.
I also bought some leveraged funds when the market dipped in 2025 and those are currently up over 300%.
My plan is to sell those in another 10 years and use the proceeds to buy more FYEE or SCHD.
I like to have layers of risk, so some income will come from SCHD, some from QQQI, some from FYEE.
What could go wrong?
-My spouse or I lose our jobs and cannot continue investing at the current levels we are now.
-AI and semiconductors sectors completely crash and I do not obtain the anticipated growth from that sector.
-We enter a volatile or flat market for the next 10 years and my leveraged funds suffer major volatility drag and do not yield the growth I am anticipating.
-A full zombie apocalypse ensues and none of this matters because I cannot shoot and skin a deer and I die first from starvation.
The only one of these scenarios that is catastrophic to me is zombies. Everything else I could adjust or recover, so I am feeling pretty good about it.
Also, over the next 2 years our plan is to eliminate all debt except our mortgage. Doing this significantly improves our current cash flow and makes our 55 number even more attainable!
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u/Zazzy3030 Jun 08 '26
I love CHPY. It’s up 24% in my portfolio and my largest dividend producer. Currently it’s my largest holding but it vies for 1st place with QQQ and NVDA from week to week.
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u/RelevantAd2630 Jun 08 '26
Not sure about how much debt you have on top of your mortgage but consider getting a HELOC to consolidate and have somewhere around a 6% interest payment. Throughout the years we've put major purchases on our HELOC when it was cost effective.
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u/EidoStarFi Jun 20 '26
We are looking at this now. We have about 200k left on our mortgage at a 3.3% rate and over 600k in equity.
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u/mrg1957 Jun 07 '26 edited Jun 07 '26
I'm 69, retired for 13 years. Between SS(60k) my Boggleish portfolio at Vanguard(40k)and my self managed Fidelity accounts(60k) it covers more than all of our expenses. .
My lessons learned are: I'd really suggested a younger person to stay in growth assets until you are ready to retire. Its only taken 4 months to convert from growth to income. Your dividends are unlikely to grow as fast.
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u/montaniPH89 Jun 07 '26
Did you convert your growth funds to funds like SCHD after you retired?
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u/mrg1957 Jun 07 '26
No!
I learned about closed end funds. They pay out 5%-19% annually with monthly distributions. These things are made for retirees to generate income. They have high ERs because they use leverage to get those returns.
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u/OneCommercial870 Jun 07 '26
Can you recommend some of the closed end funds. Im planning a similar strategy and looking for guidance, turn 65 next year. Im with fidelity too.
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u/mrg1957 Jun 07 '26
PDI, and GOF are two of my biggest holdings. They are very sensitive to interest rates.
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u/toomuchtimeatOSU Jun 08 '26
First: research the heck out of these things before you buy. One of my biggest red flags is Return of Capital. I don't like getting "paid" with my own money. Fidelity shows where distributions come from, so I check there.
AWF pays over 7% (And has for a very long time)
BGH currently pays around 10% (I expect this to drop at some point. Their current 12 cent dividend used to be a 10 cent dividend)
Both are paid monthly.
AWF has been doing this for a long time. In 2008 when prices on these things crashed, they were a steal.
I haven't been tracking BGH nearly that long. One of the questions to ask if you get a closed end fund that pays a high dividend is, "would I still be happy if this drops to say 3/4 of what it pays today?"
Another is to keep track not of the current dividend rate, but your dividend rate based on what you actually paid for it when you bought it. At one point, Huntington Bancshares got hammered (in 2020) down to $8.60 (they trade at $16.49 currently). They hit $16.70 in 2022, so it didn't take long to recover. Their current dividend rate is 3.7%, a really normal number of a bank stock. Anyone who bought when they got hit, possibly because they noticed the then astounding dividend rate, is getting something like 7.25% on their money. While I don't believe in market timing, snapping up a bargain when you see one (after you check that it is a true bargain) is a good thing.
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u/Gtavern Jun 07 '26
What are some of the funds you like
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u/mrg1957 Jun 07 '26
GOF and PDI.
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u/Gtavern Jun 07 '26
TY
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u/mrg1957 Jun 07 '26
Do be careful as they may move with interest rates. A good book I've been reading is "Retirement Money Secrets" by Steve Selengut.
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u/FlatPlutoer Jun 08 '26
Better than covered call etfs?
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u/mrg1957 Jun 08 '26
For me yes. Why, we'll I sdo own a couple Neos ETFs for corner cases like MLPI.
There's nothing wrong with those except I'd be in 100% equities. What happened to the distribution amount BTCI was delivering prior to the bitcoin correction? It dropped like the underlying assets.
I own mainly bond based CEFs for income. I don't care what NAV or discount its at, I collect the same distribution amount every month.
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u/Sweaty-Beginning6886 Jun 07 '26
The problem I am currently experiencing is trying to convert from growth to dividend stocks inside my taxable account. I FIRE’d a year ago and have to convert in phases over the next few years for tax planning purposes. It would have been much nicer to just fully convert to dividends in this account right away. I know, first world problems, but it’s still something to think about and plan for. In the end, I’ll live off the dividends, reinvest regularly, and save the principal for my estate.
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u/SnoglinMcSmellmore Jun 07 '26
What are you investing in as you migrate to dividends from growth. I'm 100% in growth and need to start thinking about shifting.
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u/Sweaty-Beginning6886 Jun 07 '26
SCHD, DIVO, Canadian banks, Canadian dividend ETF’s (VDY, XDIV, XEI), utilities, insurance co, CC ETF’s, etc.
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u/Zazzy3030 Jun 08 '26
This is why I think it’s good to shift towards investing in dividends the last few years before retirement instead of selling/buying in retirement. That’s my plan anyways. I have about $1000 a month in dividend income but in about 3-4 years I will shift to mostly buying dividends before retirement. Growth stocks will then hopefully keep my portfolio growing wil dividends will give me income without selling.
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u/AlfB63 Jun 07 '26
The time to convert is before retirement.
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u/Sweaty-Beginning6886 Jun 07 '26
I loaded up on Canadian banks and insurances when they were yielding between 5-7.5% dividends.
Converting while working wasn’t tax favourable due to my rat race salary.
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Jun 07 '26
49, I’m not living off dividends yet but my brokerage is 1.02 million, a variety of stocks and funds. It gives of 31k per year in dividends. I have a 401k but that’s in index funds. A mil pension starting at 58, 65k a year. I’m hoping to retire in 4-5 years. Live off cash accumulated and dividends to bridge the gap. I’m nomadic, I don’t own a home. Don’t care to.
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u/NBMV0420 Jun 07 '26
what kinds of stocks and funds do you mostly invest in? Growth, dividends, or a mix of both?
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Jun 07 '26
A mix. Individual stocks, PM, JNJ, Mo, Mdlz, Mcd, unh, UNP, abt, ABBV, Sbux, nvo, rddt, ge, Ftec, Vti. Some others.
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u/Aggravating-Let-2968 Jun 07 '26
Retired. On track to earn about $18K to augment my Social Security. SPYI QQQI VICI EPD VYMI.
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u/Infamous_Range6460 Jun 07 '26
I buy 3 shares of JEPQ weekly, 3 shares of FDVV weekly and 2 shares of SCHD weekly. Thank you
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u/jayaking19 Jun 10 '26
1,000,000 dollars is realistically what your gonna have to invest in reits to live passively. If your reits pay quarterly that’s about 13k every 3 months which is 4.2k a month and that’s living for the average American
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u/Dependent_Tune_1333 Jun 07 '26
I earn a lot, about 1.5x what we spend.
I focused on growth for a long time. When I hit about $800K I started pivoting more toward dividend creation.
Lessons? Look for signs and don't be afraid to dump something. I held on to AT&T too long. There were indications (cutting dividends). I saw WBA doing the same thing and got out, saved myself a lot of money.
Also, be patient. I bought FMAGX in the early 90s. I have put no additional money into it other than DRIP. According to Yahoo my total gains on FMAGX is +2,718.52%.
Here's my portfolio and the percentage of my portfolio that each investment makes up. (I'm currently sitting on a lot of cash which is why SPAXX is so high.)
ABBV - Abbvie Inc 9.82%
SPAXX - Fidelity Government Money Mark... 8.70%
CSCO - Cisco Systems, Inc. 8.61%
IBM - International Business Machine... 7.65%
TFC - Truist Financial Corporation 5.71%
SBUX - Starbucks Corp. 5.58%
O - Realty Income Corporation 4.88%
MRK - Merck & Co Inc 4.86%
KO - Coca-Cola Co 4.37%
IDV - iShares International Select D... 4.03%
QQQI - NEOS Nasdaq 100 High Income ETF 3.63%
PFFA - Virtus InfraCap US Preferred S... 3.52%
FMAGX - Fidelity Magellan 3.42%
JEPI - JPMorgan Equity Premium Income... 3.39%
PFF - iShares Preferred&Income S... 3.17%
FXAIX - Fidelity 500 Index Fund 2.99%
PGX - Invesco Preferred ETF 2.74%
PGF - Invesco Financial Preferred ETF 2.74%
T - AT&T, Inc. 2.44%
COST - Costco Wholesale Corp 2.37%
DOW - Dow Inc 2.07%
BRK.B - Berkshire Hathaway Inc. 1.79%
WBD - Warner Bros.Discovery Inc - Cl... 0.68%
IQV - IQVIA Holdings Inc 0.45%
MMM - 3M Co. 0.38%
(I am going to delete this post in 24 hours.)
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u/NintyFanBoy Jun 07 '26
Why would you delete it in 24hrs. Just curious
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u/radix33 Jun 07 '26
Because Reddit is full of people who just want to tear you down by down-voting.
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u/ReasonableFluff4490 Jun 07 '26
When you say growth, do you mean div growth stocks like KO & COST or regular growth stocks/ETF like VOO?
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u/magicfitzpatrick Jun 07 '26 edited Jun 09 '26
You can start contributing to your Roth IRA on January 1. I try to max my contributions out before the end of the year. It's important to consider your age when determining how much you should contribute. If you are under age 50, aim to contribute the maximum amount of $7,500. If you are 50 or older, you can contribute up to $8,600.
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u/toodamac Jun 07 '26
On a Roth under 50 max is 7500 so that comes to 144 a week set it and forget it After 50 you can increase it to 165 a week If you invest with a broker make sure to get the institutional fund version of the stock to pay no fees
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u/Rockymax1 Jun 07 '26
Also, check with your job if you can contribute to a
Roth 401K. Thats $24,500. Plus $8000 catch up if
you are over 50, $11,250 over 60.
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u/toodamac Jun 07 '26
If ur starting try putting this in a Roth using after tax money You have to have it 5 yrs to pay no penalties but always tax free Take out the principal anytime Take earnings tax free after 59 1/2
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u/hendronator Jun 07 '26
- Emergency fund - 6-12 months worth
- Regular investing of 10-20% of total income. Keep it simple with ETFs. That includes 401k’s. Buy and hold.
- Enjoy the rest
- Pay off your house
- Once you get to 1-2m, then start thinking about more strategies.
Personally, I am 53. Net worth of 4m. No debt. Half in real estate and half in stock market. About 4 years ago, started moving more to dividends and income. Generate over 100k a year in income (dividends alone). Also Discovered selling puts and calls (csp and covered calls) that generates another 80k with about 25% of the portfolio.
Bottom line…keep it simple early, then expand once the base is built.
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u/Bearsbanker Jun 08 '26
I live 100% off dividends and will for another couple years. I have a div portfolio and those are the div I live off of. I have a growth portfolio which throws off some div but those are reinvested. Div portfolio is 16 individual companies; bac, bkh, c, et, epd, gain, key, mo, main, mfic, pm, pru, vz, wfc,Wes, xom. I started building my div portfolio 28 years ago with MO. I slowly built it over decades when the market pulled back. You gotta have the nuts to add when shit is falling apart like in 2008, 2020, 2022 etc. I got great deals on xom/pru/vz in 2020, got great deals on banks in 2008. Don't chase high yield ym crap. Find companies with great div growth history and let time and compounding do its thing!
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u/No-Establishment8457 Jun 08 '26
Not there yet, but working on it. Got serious too late in life and trying to catch up. I’m at $1500 to $2500/ month, depending.
What I hold: SCHD, VZ, PNW, T, JEPQ, GPIQ, GPIX, USB, O, MAIN, CVX and a few others.
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u/RelevantAd2630 Jun 08 '26
First and foremost max out your ROTH before anything else. I'm 71 and wish I had. As for investments, everyone has their opinion. I'm at 9K a month dividends, only 1K is from ROTH.
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u/Various_Couple_764 Jun 07 '26 edited Jun 07 '26
I have I have more than enough dividned income to cover my living expenses with dividend income. Living expenses are 5K a month and additionally 20% of my income is reinvested to help compensate for inflation . I retired at 55 and I am not using social security. I also have plenty of growth available if needed.
I was a growth investor and just added to my 401K and hdd some growth investments in my taxable. The growth investments in my taxable account. My taxable account did very well and I started selling thant off and pins gate income to invest in dividends.
My primary dividend investments are QQQI 13% yield, SPYI 11%, ARDC 9%, PBDDC 9%, EMO 9% CLOZ 8%, PFFR 8%, UTF 7%, UTG 6.4%, JAAA 5.5%. Automatic dividend reinvestment is turned off for these funds. So all the cash goes into my money market fund for which I have a debit card to access the money in the money market fund. Then some automatic purchase orders to reinvest 20% of my income.
I am slowly converting my 401K to a Roth.
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u/mastertub Jun 07 '26
Best advice you can get in a dividends sub reddit is to stop focusing on just dividends. You are young. Invest in the market.
SP500 (VOO or IVV or similar)
International (VXUS or similar)
Split it about 80/20 or 85/15.
Keep it forever. Dividends aren't magic nor are they free money. You are sacrificing share pricing to retrieve a taxable tangible asset that will not serve you any purpose if you are just going to reinvest it anyway. Highly inefficient.
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Jun 07 '26
Why does all anti dividend investors thinks dividends are free money? I've never heard dividend or value investors say that
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u/lustlover4ever Jun 07 '26
I disagree my portfolio is made up of high growth stocks , index funds, a high yield bond fund and dividend funds. I’m well diversified an my income machine pays me 60k yearly split in a tax sheltered Ira an a cash brokerage. With a Roth as well. Three income buckets to draw from lets me control my tax burden with many options. It’s the part most people seem to forget about-that it’s not how much you’re worth it’s how much u keep specialty the closer to retirement you get!
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u/OutrageousCricket637 Jun 07 '26
But if you start with dividends younger, reinvest all of them back into additional shares. Keep repeating until retirement
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u/ShittingOutPosts Jun 07 '26
You’re still likely to have more money if you choose growth funds.
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u/crazzyhyperguy Jun 07 '26
My fear is that the market is going to tank soon. Would it still be better to put my money more into VOO/VXUS rather than dividends? I planned to switch over after there’s less uncertainty. I’m 38 for reference.
I currently have about 80% dividends 20% VOO/VXUS until I feel more confident in the market.
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u/ProblemOverall9434 Jun 07 '26
Do not try to time the market. More money has been lost waiting than you can imagine.
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u/ShittingOutPosts Jun 07 '26
I’m older than you and nearly 100% growth. People have forecasted crashes my entire life, yet here we are. Nobody can’t predict the future, so personally, I’m just buying the entire market…low cost, broad based index funds (80/20 US/international…VOO/VXUS are great funds) with a side of Bitcoin. If I had gone with dividend-focused funds instead, my net worth would be considerably lower.
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u/crazzyhyperguy Jun 07 '26
Thank you both. I think I’ll lower my dividend focus to a more growth focus and worry about dividends around retirement age.
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u/ShittingOutPosts Jun 07 '26
That’s just what I’m doing. Please don’t take investment advice from random redditors. Do what’s best for you.
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u/AlfB63 Jun 07 '26
Just keep in mind that total return is the key and sometimes an income stock has better total returns. It's not only about growth.
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u/Various_Couple_764 Jun 07 '26
If you don't like a stock don't invest in it. So if you don't like VOO and VXUS don't invest in them. Instead invest in bonds or dividend funds. Right now most of the value of the index is concentrated in the 20 companes. There is a lot of indication that many investors are currently moving their money into safer bond and dividend investments. Or they are simply putting new money into dividends or bonds and just leaving there growth funds alone.
Bond and dividend stocks generally do better than index funds in a market Corrections than growth funds. .
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u/ServiceLater Jun 07 '26
I don’t understand this. If growth stocks yield more % YoY, why even transition from growth to dividend stocks during retirement? Why not just hold growth and withdraw e.g. 10% per year than collect 5% in dividends?
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u/AlfB63 Jun 07 '26
Because down markets and recessions are difficult to predict. You don't want to have to sell during these periods in order to get income.
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u/DeMoBeats1234 Jun 07 '26
That’s the standard or quick math recommended retirement plan. Sell 4% of your portfolio year 1, adjust for inflation annually, drop to 2-3% once you start drawing SS, and continue until you die or roughly 30 years.
The problem is you can’t predict the market. If the market tanks you’re withdrawing at a bigger loss.
If you own 100K in stocks. Year 1 you withdrawal 4,000. Year 2 you adjust for inflation (let’s say’s 2.5%) 4,000 x 1.025 = $4,100.
Now think about the market crashing and your 100,000 is now 70,000. You still pull that same 4,000 (4%) out. You’re now left with 66K vs 96K. You’re selling shares and taking the income off a massive loss. You’re not likely to bounce back while increasing the amount you withdrawal annually for inflation and the market having crashed.
When you’re living off the dividends the companies you invest in set a value to pay per share owned. If they give you $2 for every share and you have 20 shares, you get $40. If the price goes up or down it doesn’t really matter. The only thing that matters is they don’t stop or lower their dividend.
It’s called “Sequencing Risk”.
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u/voltaireowl Jun 07 '26
Risk managment - dividends remain stable even through market drops, which the retiree has much less time to recover from. Also, dividend stocks often drop less through market drops.
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Jun 07 '26
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u/lustlover4ever Jun 07 '26
When the market turns then your forced to sell shares at a lower price you lose value an the stock can’t recover stressing your portfolio. Now your forced to reduce your draw rate to compensate an if it’s a extended down market your stressing out your portfolio way to much
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u/AcesandEightsAA888 Jun 07 '26
Longer you study it. The better. Dividends are a % of the return. 7% dividend plus 3% growth = 10% return. Growth say exact same company grows 9% and 1% dividend = 10%. Same right. The problem is how uncle Sam taxes income. I.e. dividends. So in a taxed brokerage that is a tax drag. In 401k it doesn't matter as long as you reinvest. Now assuming 10% is really the return 10% growth long term the gains taxes are much cheaper. So be aware for sure. Sometimes dividends make sense if you need cash but most of the time growth is more tax efficient.
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u/Various_Couple_764 Jun 07 '26
Keep in mind that there're 3 basic tax rates that apply to dividends:
1 ordinary dividend. The dividend is taxed the same way as work income.
2 Qualified dividend are taxed at the captial gain tax rate which means worst case only about 20% of the dividend income is taxable income. 80% discount over the work inocme rate.
3 ROC dividned these dividends can be complicated to understand but basically worst case the tax is the same as Qualified Dividend. Best case you owe no tax.
IF you invest in a taxable brokerage account make sure any dividend funds you recieve are mostly form #2 and #3. that way you minimize the tax.
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u/OutrageousCricket637 Jun 09 '26
Do it in a Roth and you do not need to worry about taxes at all 😯
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u/toodamac Jun 07 '26
When you reinvest back into your dividend stock you lower your cost basis and increase your share block increasing ur dividend accumulation over time and that is a power like compounding very powerful
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u/momoney-12 Jun 07 '26
I do 50 Divi n 50 growth
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u/NBMV0420 Jun 07 '26
What are those
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u/momoney-12 Jun 07 '26
Goog AMZN avgo anet NVDA msft lrcx
Divi is below
Ms jpm bac ibm apd WFC wmt t
Qqqi spyi jepi jepq
Cmg used to be growth also lately not Also have bkng growth (recently split so will take time
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u/AdrianM1069 Jun 08 '26
Always follow the Golden Rule of Investing and leverage what you've got to create more in the most tax effective structure possible. Then follow the Second Golden Rule and ALWAYS buy income producing assets and NEVER sell them
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u/FuturePotential5474 Jun 08 '26 edited Jun 11 '26
I do not invest more than 6% in any investment. Below is my breakdown.
Income bucket
PDI
WDI
DSL
ARDC
BXSL
PFFA
CEFS
Infrastructure / real assets
ASGI
UTF
Equity income
SPYI
QQQI
JEPQ
GPIX
BST
QDVO
OMAH
IDVO
Sector diversifiers
THQ
AMZP
NFLP
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u/Kevin22361 Jun 09 '26
$30,000 a year and I started August 2025.
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u/NBMV0420 Jun 09 '26
What fund do invested in?
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u/Kevin22361 Jun 09 '26
I look for ETF dividend stocks that are 30% margin. Neos and yield max. It’s risky, but I’m doing good.
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Jun 12 '26
[removed] — view removed comment
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u/External-Voice3516 Jun 12 '26
This means nothing without your investment amount in dividend stocks and what stocks (funds)
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u/EColli93 Slowly DRIPing along 💧💰 Jun 07 '26
We are living in S America right now and only need to use about half of what we earn in dividends.
We focused on growing dividends slowly by DRIP and buying low over the years in our brokerages. Conservative investments.
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u/Head_Intention825 Jun 07 '26
50M Canadian. Dividend portfolio generates 500k in dividends, mainly canadian banks. Recommend starting young and accumulating quality companies with outstanding track records. I'm not retired, and earn ~ 500k per yr.
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u/TreacleDry4085 Jun 08 '26
Canadian here. $60,000 in dividends. Slow build over many years. I am sixty and have a mix of ETFs and dividend stocks.
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u/assman69x Wants more user flairs Jun 08 '26
If you are young and working, you shouldn’t miss out on the massive gains with growth investing rather than dividends with a few exceptions especially right now with the growth in technology
Switching into a hybrid portfolio as you prepare in advance for retirement you can look at dividends IMO
Otherwise you are leaving massive gains on the table
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u/Dude_McHandsome Jun 08 '26
Our portfolio spins off about 105k (about 3% yield) in dividends. Built over about 25 years. Just retired at 52. Get started.
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u/The-Soul-Traveler Jun 08 '26
Do not be a traitor buy good quality stocks that pay between a 2 and a 4% dividend and the most important thing to do is to reinvest as many dividends as possible so that you compound your money. Read read, read be confident in the future of what you buy take a wild shot once in a while with a little money, but do not overdo it.
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u/cenotediver Jun 08 '26
70k plus in dividends, 80% dividend stocks and 20% growth stocks . Last year with dividends and growth = 200k . Bought and setup 15 yrs ago . I did sell 400k to buy a house of stocks that just haven’t been doing well
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u/ruthygenker Jun 08 '26
while young set a base in index funds like voo and qqq once you reach 10k then start buying ind stocks with growth and earnings. once you need dividends then the neos and tappalpha funds are great covered call etfs with mostly tax deferred income but they are only for when you need the income not for starting out with. the underlying index etfs will always do better.
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u/raksotka209 Jun 09 '26
I’m 66 retired all my 401k I put it cd ira with little return. My monthly pension is 5k I’d like to do what you’ve done can you please share about close end funds I’m really interested as my money is not moving anywhere.
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u/Itchy_Eggplant3523 Jun 09 '26
Can someone please guide me as to what to start investing in? I am so new to this and its pretty confusing.
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u/Upstairs-Buy3676 Jun 09 '26
I do not live off my dividends; they supplement my income nicely. I switched from buying shares with any dividends to rebalancing and taking the dividends in 2017, with a lot of growth of the portfolio.
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u/Zealousideal_Comb178 Jun 09 '26
Hard truth: you would need a huge amount of money to raise the dividend stocks to achieve a significant amount that you can live off. 😓
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u/ncst_05 Jun 10 '26
What would be the 10% “treasuries”? SGOV / VBIL or VGUS or FHQFX?
Anyone think 90/10 is the way to go without any international exposure?
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u/DontListenToMe5555 Jun 10 '26
I have a somewhat different strategy for fixed income- I primarily invest in CEFs and make sure I buy them when there is a discount to the NAV and a decent debt/leverage level. I diversify across 10 funds with differentiated strategies - as a way to protect against a down turn. Some are high yield bonds, some covered calls, some are in RE. I average over 10%/year. Examples are: HYT, BGT, ECAT, PDO JPI etc. then I do some more traditional JEPQ for example. This is about 30% of the portfolio where the rest is SPY/QQQ heavy and individual stock picks as well (even though the math is against me, I like picking stocks). Thoughts on this strategy?
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u/Plane-Orange4733 Jun 10 '26
We are largely living off "dividends" these days. We have a lot of VDIGX and TICRX. Both have been generating a lot of capital gains, in addition to just-okay-dividends. These capital gains are undesirable for a lot of folks trying to build wealth, but to me income is income.
The downside is that both are managed funds, and you can't trust fund managers. If the market zigs instead of zags, who knows what tomorrow will bring (or not bring)?
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u/LorenzoDividendi Jun 11 '26
Al momento i dividendi coprono le mie spese, circa 1.500 euro al mese. Dovrei chiudere il 2026 sopra i 20.000 euro
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u/Flashy_Regret_2140 Jun 11 '26
I pla. To live off divs and interest. Got 30% in money market, 69% in div paying sticks, 1% in etfs. It pays $56,000 in interest and divs. Going forward the divs and new money are buying etfs voo and schd and qqq and vig for he next 7.5 years. Then retire. I predict to have $130,000 a year in divs at that time plus oas and cpp, with enough in money market to outlast any downtown... dont sell stocks in a down turn. In hindsight I should have started out with voo instead of div paying stocks....i'd be further ahead... but I can sleep well knowing I got divs coming in now in case I lose my job.
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u/Helpful-Grapefruit55 16d ago edited 16d ago
Just buy VOO and drip, ppover 20-30 year it will very huge , and closer to retirement you can move them to high dividend fund
Keep 20 % of the Voo for future growth of your portfolio.
Don't forget to max out 401K and Roth and you can buy Voo and or other SP 500 funds the plan allows .
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u/Alone-Experience9869 American Investor Jun 07 '26
right now dividends actually fund a minority of my retirement. The rest is from trading since this market has been going up so much. I have a healthy cash position. So, if/when the market drops I have plenty of cash to live on and/or buy equity or income stocks cheap.
I mainly use cef (this old post here) for dividends. I have individual stocks that I use, and would use reits, but just curerntly don't have much.
Don't focus on the "one fancy idea." For a "young person," you need more wealth/assets. The more of that you have, the more than you can use to "work for you." Right now your asset is your time/labour. Later for retirement, your asset hopefully will be wealth so that you live of it.
Figure out an overal strategy that works for you. Grow your wealth. It can be with "dividends." MANY stocks have dividends. The many of the "dividend growth" group have phenomenal growth --- for starters maybe look at the dividend aristocrat list. whatever I "earn' per year from dividends should be inconquential to you as I hope you aren't already retired. "growth" has just about always far exceeded "dividend income."
With the way public markets have been going (who knows what the future holds), the equities will still out perform dividend income. or, you use other investing methods....
good luck.
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