Here is my 12 month plan to build a stock portfolio that earns $500 per month in dividends.
I estimated the value of stocks required to achieve a yearly dividend of $6,000 will be around $100,000.
I won’t be using a lump sum of 100k, instead I will be slowly building up the portfolio and documenting how I do it. Yeah I know…some expert said buy ETFs, including Warren buffet who never bought an ETF in his life afaik.
So I won’t be either.
But most people are using 4% as a return yardstick and most ETFs are now only paying around 3% dividends?
Yep, one of the reasons I will not be buying ETFs unless it’s for a very specific reason.
ETFs that most recommend just buy an index, and many in that index do not pay dividends.
My goal is $500 per month of mostly passive dividends. And I’m hoping to pick up some growth along the way though there’s always a chance that the market drops 10, 20 percent or more.
To start I have $10,000 saved up just for this project. I will be adding as much as I can each month from my earnings and from a long list of accumulated items of “stuff” that is clogging up my garage and a whole lot of space in the house. Ebay is my friend.
I’m hoping to get the first 50k fairly quickly, after that no so much.
I’ve opened an account with a budget broker and deposited the 10k.
Stock Portfolio Strategy
I will not be buying index ETFs.
I will be building the portfolio of stocks one at a time with the majority being in the top 50 by market capitalization. A few Tech stocks that I like will also be added.
I won’t be using any DRPs.
Starting up I will be buying 5 stocks for the value of $2,000 each, wish me luck.
Have you started your dividend income portfolio yet?