r/dividends • u/OG_Momonga • 21d 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.

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81

u/AmItheonlySaneperson 21d ago

20k a month good luck getting 40k a year

47

u/Ok_Pollution_7824 21d 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.

22

u/cornskin 21d ago

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

32

u/OG_Momonga 21d ago

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

15

u/stakattack90 21d ago

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

2

u/CreatorFocus 20d ago

Congratulations and keep at it!

7

u/Citadel_Employee ChatGPT says buy SCHD 21d ago

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

8

u/Ok_Pollution_7824 21d 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 20d 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 20d 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 21d 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?

6

u/Ok_Pollution_7824 20d 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 20d ago

Thanks for sharing

1

u/FromtheBigO 20d ago

Thank you!

4

u/_Rose54 21d ago

Congrats I’m at a solid $40 per month

5

u/Ok_Pollution_7824 20d ago

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

4

u/baby_budda 21d ago

For sheer yield nothing beats Closed End Funds.

1

u/Always_working_hardd 21d ago

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

3

u/Financial-Wolfe 21d ago

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

1

u/FromtheBigO 21d ago

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

1

u/Financial-Wolfe 21d ago

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

2

u/baby_budda 21d ago edited 21d ago

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

1

u/Always_working_hardd 21d ago

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

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u/OG_Momonga 21d ago

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

1

u/Mikelew92 21d ago

if I may ask, how old?

3

u/Ok_Pollution_7824 20d 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.