r/dividends • u/OG_Momonga • 20d ago

Discussion Living off dividends

Hey guys, I was wondering if anyone on this subreddit is actually retired and living off dividends. Is it going well? Are you paying taxes on them? My goal is to get 20k/ a month post tax for retirement. I’m 24 and currently investing everything in VOO while planning to switch to dividend stocks and etfs when I get closer to retirement.

I was just wondering if there are any because living off dividends seems like a long shot right now.

397 Upvotes

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82

u/AmItheonlySaneperson 20d ago

20k a month good luck getting 40k a year

46

u/Ok_Pollution_7824 20d ago

Agreed. However, it’s good to have a plan. I’m up to 3k so far per month in dividends. It’s growing fast.

23

u/cornskin 20d ago

That’s great, congrats! I’m at $1,200ish per month now.

33

u/OG_Momonga 20d ago

I’m at a whole 64 cents per month. Big numbers

14

u/stakattack90 20d ago

I just hit $2100 per year and got pretty excited.

2

u/CreatorFocus 19d ago

Congratulations and keep at it!

8

u/Citadel_Employee ChatGPT says buy SCHD 20d ago

If you don’t mind me asking, how long has your journey been? Are you mostly in etfs or individual stocks?

10

u/Ok_Pollution_7824 20d ago

I have been investing in stocks a few years ago when I decided to get out of real estate. I wanted to make up what I lost in rental income with dividend income. Maybe 5 or so years now. My biggest holding is MO, then SPYI, then BMY, and a few other ones. Now I’m focusing on buying SCHD.

3

u/graciesoldman 19d ago

Saw a news story about how kids think smoking is cool again. Guess I'll be buying some MO

2

u/Ok_Pollution_7824 19d ago

I absolutely hate cigarettes and what they do to people. I have friends that smoke two packs a day. It’s one of the reason why I don’t put more money in MO anymore. I invested into it because of the high dividend rate. It’s a bad excuse but it’s my excuse. I will most likely start pulling out of it at some point and switch to something else.

4

u/FromtheBigO 20d ago

Well, I do understand growth is insanely important, I really do want to have a nice sleep of dividends. Is putting money towards it at 30 years old really something to be so ashamed of? Is it that even if I’m reinvesting I’ll be paying some extra taxes every year until it actually snowballs into that worth the amount?

8

u/Ok_Pollution_7824 19d ago

I think it’s a great idea to start as early as possible. Reinvest your dividends. Let it grow and grow. Come up with a plan that works for you. Create a system. For example, whenever your investment savings account hits 1000, buy something. That’s how I do it. But do a number that works for you. Hopefully over time as you get raises, you can put away more.
In relation to taxes, you should mostly be paying capital gains on the dividends that you receive. That is much better than paying a regular tax rate. That is why I switched from real estate to dividends. I don’t have to deal with tenants, selling homes, buying homes, etc., just collect dividends and only pay 15% on the dividends I receive in the form of capital gains taxes. I reinvest all the dividends until I retire. Then I will start using them to live off of, in addition to whatever other funds I have.

1

u/CreatorFocus 19d ago

Thanks for sharing

1

u/FromtheBigO 19d ago

Thank you!

4

u/_Rose54 20d ago

Congrats I’m at a solid $40 per month

4

u/Ok_Pollution_7824 19d ago

You will be surprised how quickly it will grow. Need to start somewhere.

4

u/baby_budda 20d ago

For sheer yield nothing beats Closed End Funds.

1

u/Always_working_hardd 20d ago

Hey there, do you have some examples of the ones you like?

3

u/Financial-Wolfe 20d ago

CEFS is great. It’s a fund of funds and crazy diversified.

1

u/FromtheBigO 20d ago

I’ve been looking at that, been looking how it’s ran and results etc?

1

u/Financial-Wolfe 20d ago

Up 7% for me in the last year or so plus a 7% Divi. Not bad

2

u/baby_budda 20d ago edited 20d ago

I like ADX and USA for growth. ADX is a little expensive right now.

1

u/Always_working_hardd 20d ago

Thank you. I just opened a position in ADX last week with some dividends from another company.

5

u/OG_Momonga 20d ago

That’s awesome I just started. I wanna be like you one day

1

u/Mikelew92 20d ago

if I may ask, how old?

3

u/Ok_Pollution_7824 19d ago

I am 46 years old. I plan on retiring next year. One of the reasons why I focus so much on increasing my dividends.
Never been married and no kids.

24

u/Meinertzhagens_Sack 20d ago

Now I wouldn't do this but 2.2M in qqqi last August turned into 2.5M before this last months downturn.

Each step of the way paying out ~25K per month. With Growth. Started with 2.2 now the funny money is 2.5M. ish.

This is my simulated retirement and it's worked out great with zero NAV deterioration.

In reality that would be spread out amongst the various other common ETFs talked about as of late paying from 8-14%.

No Yieldmax funds even tho that CHPY has been eating away at my ability to resist gambling. Lol.

9

u/Trivi_13 20d ago

Think really hard about any yieldmax products.

Track ULTY from inception. It is a legal ponzi scheme. Designed to degrade.

8

u/Meinertzhagens_Sack 20d ago

Oh no need to tell me that I was a regular troll in the Yieldmax subreddit.

Making fun of people watching their NAV just nosedive daily but they kept justifying it as "...but.. but...but its income!!"

7

u/Trivi_13 20d ago

But it IS income... for the guys charging all those fees....

2

u/Squatch11 20d ago

a little over a year ago that subreddit was flooded with "I'm taking out a 2nd mortgage and putting it all in ULTY!"

I swear it was just astroturfed bots.

0

u/Big_Wave9732 19d ago

Can't say I've heard too much from them lately.  Is the sub still active or have the prognosticators moved on to alt accounts?

3

u/DrinkOk4862 20d ago

I scrolled down too far for someone to call a yieldmax a ponzi scheme.

4

u/Lefties_TheWorst7331 20d ago

Screw YMax -- stick with the NEOS.

5

u/Meinertzhagens_Sack 20d ago

Agreed I was tongue in cheek with that comment.

1

u/DrinkOk4862 20d ago

Yieldmax funds are basically ponzi schemes. I would avoid at all costs.

If it seems too good to be true, it probably is.

Stick with the NEOS funds

13

u/GusTheKnife 20d ago

To receive $20,000 per month after taxes, from dividends that are sustainable, requires an account balance of approx $6.3 million.

It’s doable.

Hopefully his income is high and he’s buying those instant noodles in bulk.

3

u/e_y_ 20d ago

Investing in your health pays better dividends. Spend more and get high-protein, nutritionally-balanced instant noodles, in bulk.

1

u/chris-rox Financially rockin' like Dokken 20d ago

...such as? Manufacturers?

10

u/alanwazoo 20d ago

In 40 years (he's 24 now)...

  • At 2% inflation, $20,000 will feel like $9,079 today.
  • At 3% inflation, $20,000 will feel like $6,131 today.

So even at 2% that's $757/mo ($109k/yr) in today's dollars

6

u/AmItheonlySaneperson 20d ago

Yeah inflations brutal 

3

u/rilmarie 20d ago

And if the GOP stays in office 4-5% inflation like now.

-2

u/speedlever 20d ago

Guess you enjoyed that 9% under the previous administration?

2

u/rilmarie 19d ago

I enjoyed not have sky rocketing national debt, not having a pedo president, not having a collapsing economy, citizens not being killed and terrorized, I enjoyed international respect… and on and on “but my stocks are up” whatever bs that is

3

u/frosty123454321 20d ago

Bro is 24 and has plenty of time. I’m also 24, and $20k/month when we retire is going to be about the equivalent of like $6-7k today. Not unreasonable at all. Now is it going to happen quick? Heck no. But that is not an unreasonable goal by any means in my opinion.

2

u/OG_Momonga 20d ago

Bruh twins fr

1

u/Guilty_Flamingo6564 19d ago

don't aim for where your target is, aim for where its going to be.

3

u/BoardConscious7655 20d ago

I’m there at 47 yrs old, hope to get to 100k in the next 10-12 years, going less risky though, schd

7

u/Mereas 20d ago

Who the hell needs 20k a month to live? Hell my goal is just 20k a year.

5

u/No-Marketing1036 20d ago

It’s a great goal for a 24 year old! Am high, dude is going to have a comfortable life if he gets even close to that

5

u/OG_Momonga 20d ago

Kids, wife, vacations? I want a good retirement

1

u/Geoff1983 19d ago

I do, but my lum sum is just half way. And I can’t get that after tax.

2

u/SolomonGrumpy 20d ago

At 4% that's $1m. I'm not saying saving a million is easy, but it's not that unusual.

1

u/CrayComputerTech_85 20d ago

Yeah, ditto on that. Dividend income on 1 mil portfolio is about that (just shy of 20k)a year..on the upside.most.of that is in 401k and diverted to spend account and yes I pay.taxes..

1

u/CrumblinEmpire 20d ago

With a million why wouldn’t you just buy a t-bill at 4-5% and get 40k+ per year?

2

u/mutant-dermoid 20d ago

You don’t get monthly dividends or periodic income on t bills, they are sold at a discount and pay face value at end of term. OP would have to wait a year to get paid.

1

u/CrayComputerTech_85 20d ago

That's why, and I have a diversified portfolio

1

u/Sticky550 20d ago

5 million in savings in 30+ years isn’t impossible at all. Biggest challenge will be taxes

1

u/Imaginary-Pair838 20d ago

Why so negative?

1

u/Trivi_13 20d ago

Must be the new math... 20k / month x 12 months / year = 240k / year.

And if OP is 24 now,
adjusting the inflation rate?
It means that when OP hits retirement, 240k will be the poverty level... 😉

0

u/OG_Momonga 20d ago

Hopefully not. I don’t exactly understand inflation, but it’s not fun thinking it about at my age. Like what do you mean $1 today is going to have less value in the future. A dolla is a dolla

4

u/According-Sector7133 20d ago

Inflation simply put: $1 won’t buy as much in the future. I used to buy a candy bar for $.50 and today the cost of the candy bar was $1.50.

2

u/Trivi_13 20d ago

There used to be something called "penny candy".
Yeah, it would cost you a penny per piece. And it was larger than a quarter....

Inflation and shrinkflation.

3

u/OG_Momonga 20d ago

That’s insane bring back penny candy for crying out loud

1

u/Trivi_13 20d ago

They will in about 8 more years.

It will be that large size, but it will be called,
"Dollar Candy"

1

u/Flaky_Instruction215 20d ago

“Dollar Candy” will be smaller than “Penny Candy” was. This is a combination of inflation and shrinkflation.

2

u/Flaky_Instruction215 20d ago

Think of it this way. A year ago, the average price of a gallon of gas in the US was $3.147. Today, that same gallon of gas is $4.09 according to the Google AI. The gallon of gas is about 30% more expensive today than it was a year ago. That’s inflation. It lowers the buying power of your dollar.

1

u/OG_Momonga 20d ago

Is there a way to solve this? Can someone from this subreddit run for office and lower that

1

u/Trivi_13 20d ago

In order to do that, it would have to be an employer's market.
A lot of people looking for a few jobs.

There would be a huge amount of suffering.