Dividend Income from $10,000 (Not What You'd Think)

we meet John a hard-working accountant in his late 20s who saved up ten thousand dollars over the past years he's always dreamed of earning a passive income through investing but the fear of the unknown has always held him back but John has been bombarded with a couple of challenges recently he's having great trouble repaying his looming debt and paying rent and the sad part his emergency fund hasn't been steady but with his ten thousand dollars in savings John quickly realizes that he must start earning a passive income that can help him resolve some of his troubles until he completely frees himself from the impending disaster John decides to start investing in dividends but he has only two options to invest using low risk low reward methods or indulge in high risk High reward strategies which we're going to demonstrate in this video we'll show John's seven strategies starting with the most common and safest ones going all the way to the riskiest and most rewarding approach watch till the end because we'll show you how John can make quick money to fund his long-awaited trip to Switzerland with the riskiest strategy at the end number one dividend paying stocks you see dividend investing is a method for investing in stocks that gives consistent cash payouts to shareholders as a reward for owning their stock and if you invest in companies that have a long history of paying and increasing their dividends you can potentially reap the benefits for years to come take the S P 500 for example which is a stock market index that tracks the performance of 500 large cap companies in the U.S the S P 500 has an average dividend yield of around 1.5 to 2 percent while the percentage yield sounds low John can invest directly in some dividend Aristocrats listed in the index that have a history of paying and increasing dividends such as Coca-Cola Johnson and Johnson and Proctor and Gamble now Coca-Cola for instance currently has a dividend yield of 2.94 percent and has increased its dividend for 58 consecutive years let's say John decides to invest ten thousand dollars in Coca-Cola which as I mentioned currently has an annual dividend yield of 2.94 percent this means John would receive roughly ten thousand dollars times 2.94 which equals 294 dollars annually in dividend income while this amount sounds pretty small at first John can contribute to his emergency fund over the years sadly John discovers he has looming debt and as the interest rate continues to hike he has to earn extra money to repay his debt quickly here are the possibilities where he can repay his debt faster number two Dow Jones dividend aristocrats the Dow Jones Industrial Average is another stock market index that tracks the performance of 30 large cap companies in the U.S the Dow Jones has a list of dividend Aristocrats which are companies that increase their dividends for at least 25 consecutive years for example Johnson and Johnson is a Dow Jones dividend Aristocrat that currently has a dividend yield of around 2.4 percent if John invested ten thousand dollars in Johnson Johnson today he would receive approximately ten thousand dollars times 2.4 percent which equals 240 dollars per year in dividends which he can channel into debt repayment number three dividend focused ETFs investing in ETFs that focus on dividend-paying stocks can serve as a safe way for John to make extra income for example the Invesco S P 500 High dividend low volatility ETF also known as sphd tracks the performance of 50 High dividend yielding stocks in the S P 500 with low volatility as of April 2023 sphd has an annual dividend yield of around 4.06 percent if John invested ten thousand dollars in it he would receive around ten thousand dollars times 4.06 percent which is 406 dollars per year in dividends which he can redirect to his retirement savings with the next method we're going to show you how John can make money to contribute to his 401k instead of relying entirely on his salary deductions as if that's not enough the next strategy can help John find some cash to buy an online course so he can get a pay raise at work if the certification turns out great number four sector ETFs now John can invest in ETFs that focus on specific sectors that tend to have higher dividend yields such as real estate utilities and consumer staples for example the Vanguard real estate ETF or vnq tracks the performance of the msci U.S wreath index which consists of companies that invest in real estate and here's the thing guys investing in sector ETFs can provide an opportunity for investors to earn dividend income while gaining exposure to industries that are expected to perform well in the current market conditions now let's take a look at how John can make some money off the vnq dividend payout with a ten thousand dollar investment as of April this year the vnq had a dividend yield of around 4.15 percent if John invested ten thousand dollars in this ETF he would receive roughly 10 000 times 4.15 percent which equals 415 dollars per year in dividends he can Channel this amount to acquire new skills that can provide a professional Advantage at the workplace other popular sector ETFs include the technology select sector spdr fund the healthcare select sector spdr fund and the consumer staples select sector spdr fund now John might want to grow his real estate portfolio from scratch while still making some cash and in the next section we're going to see exactly how he can do that number five real estate investment trusts real estate investment trusts also called REITs are companies that own and operate income generating real estate properties such as Apartments office buildings and Retail spaces they're required to distribute at least 90 percent of their taxable income to shareholders as dividends which makes them a popular choice for dividend investors and here's what's interesting REITs offer investors the opportunity to earn regular dividend income while gaining exposure to the real estate market without having to purchase physical properties some of the most popular REITs include Simon Property Group Pro lodges Incorporated and Equity residential let's take for example the Simon Property Group or SPG it's a real estate company that owns and operates shopping malls and Retail spaces in North America Europe and Asia as of April 2023 SPG has a dividend yield of 6.56 percent and its dividend payout ratio is 85 0.16 percent so if John invests ten thousand dollars in Simon Property Group and desires to have exposure to the real estate sector without having to buy a house he'd earn about ten thousand times six point five six percent which equals six hundred fifty six dollars in annual dividend income as we've seen the safest methods of dividend investing can be slow but quite steady and now comes the exciting part high risk High reward strategies implementing these techniques wisely might actually Elevate John's portfolio into the millions in just a couple of years number six riskier strategies in reality riskier strategies may not be the best fit for everyone you need to exercise caution when choosing this approach most importantly do extensive research and consult with a financial advisor before embarking on any risky strategy One Way John could potentially make close to one thousand dollars per year with a high risk strategy is by investing in high yield dividend stocks these stocks offer higher dividends than the average but they're associated with more risk one example we're going to look at is Altria Group Incorporated a tobacco company that has consistently paid a high dividend yield over the years as of April 2023 its dividend yield is 8.46 percent if John invests ten thousand dollars in Altria he could potentially earn ten thousand times eight point four six percent which equals eight hundred forty six dollars in annual dividend income which is a sweet return if you ask me a another example is energy transfer LP a mid-stream oil and gas company that offers a high dividend yield of 9.75 percent if John invests ten thousand dollars in energy transfer he could earn roughly 10 000 times 9.75 percent which equals nine hundred seventy five dollars in annual dividend income John can reinvest the money and increase his chances of earning more through the power of compounding high yield dividend stocks are often volatile John would need to diversify his portfolio to effectively mitigate risk in addition he has to consult with a financial advisor to understand the tax implications involved now in this final section we'll show how John can Finance his trip to Switzerland using a very risky but highly rewarding method number seven the riskiest strategies the riskiest strategy for earning passive income from dividend investing is by selecting high yield dividend stocks these are companies that pay out a high percentage of their profits as dividends which can result in a higher dividend yield however high-yield stocks also come with more Peril as companies that pay out a high percentage of their profits as dividends may not have enough cash flow to reinvest in the business and grow over time assuming John is willing to take on more risk to earn a higher income here's how he can invest and make over a thousand dollars one great example of a high-yield stock is Annalee Capital Management Incorporated also known as nly it's a real estate investment trust that invests in mortgage-backed Securities as of April this year Annalee Capital Management had a dividend yield of a massive 13.56 percent which is well above the average dividend yield of the S P 500 let's say John decides to invest ten thousand dollars in NL why at a dividend yield of 13.56 percent John would receive roughly 1 356 dollars in annual dividends remember high-yield stocks may not always sustain their dividend payouts because of high Market volatility so while John might earn a lower amount one year he could get a handsome payout the next year if John applies these riskier strategies his dream to travel to Switzerland may come true now John wants to live completely off of dividends click the video on your screen to see how

Channel: John's Money Adventures

Views: 245,974

Keywords: wealth secrets, wealth, secrets, dividend income from $10000, dividend income, dividend, passive income, side hustle, investing for beginners, dividend passive income, dividend investing, dividend growth investing, dividend stocks 2023, stock market, passive income investing, investing 2023, investing strategies, how to build wealth, investing, finance, business, investment, financial education, personal finance, how to get rich, rich, self improvement, personal development, success

Id: py-xvDe9RcU

Length: 10min 59sec (659 seconds)

Published: Sat Apr 22 2023