49-Year-Old Makes $5,180 a Month in Dividends With ‘Helps Me Sleep at Night’ Portfolio – Top 10 Stocks You Can’t Miss
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Investors invest in dividends to increase wealth and balance out their growth portfolios to hedge against risks. Dividend stocks have proved their mettle during market downturns and volatility in the past. Data shows that a Mergent index of dividend growth stocks was 20% less volatile than the S&P 500 over a period of 10 years.
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About two years ago, a dividend investor shared his detailed income report, story and portfolio screenshots on r/Dividends, a discussion board for income investors with more than 622,000 members. His portfolio details showed he collected $62,193 in annual dividends or $5,183 per month.
From Growth to Dividend Investing
The investor, 49, said he’s been focusing on growth ETFs for 25 years but shifted to dividend investing in the last three years.
The investor’s portfolio screenshots showed that he invested about $2.71 million in about 20 stocks/ETFs and his initial investment value rose to $3.1 million over time.
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Creating ‘A Lot of Wealth’ Through Business
He was asked how he was able to accumulate wealth for investment. He said he had worked high-paying jobs and also started businesses (software sales):
“Owning a business does come with risk, but it also creates a lot of wealth opportunity through tax and expense savings and revenue distribution strategies.”
‘Little By Little Adds Up’
The investor also shared how starting to invest early in life gave him an edge:
“First job out of college was $27,300/yr. I signed up for my company 401(k) plan and that’s where I started. Little by little adds up, especially when it’s automatically (re) invested.”
He said even dividend payments from growth ETFs have been a “boon” for his dividend income.
“The combination of growth and fixed income is what helps me sleep at night.”
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Let’s look at some of the biggest holdings of this dividend portfolio.
Vanguard Total Stock Market ETF
Total portfolio weightage: 46.6%
The investor’s biggest position was Vanguard Total Stock Market ETF (VTI), which earned $5,180 per month in dividends and accounted for about 46.6% of his total portfolio. Vanguard Total Stock Market ETF gives investors exposure to the entire stock market, as its portfolio consists of about 3,600 small, mid- and large-cap stocks. It pays quarterly dividends and has a yield of 1.4%.
Vanguard Total International Stock ETF
Total portfolio weightage: 14.2%
The investor’s second-biggest holding was the Vanguard Total International Stock ETF (VXUS), which earned $5,180 per month in dividend income. The fund gives investors exposure to international equities trading outside of the US. VXUS has a dividend yield of about 2.4% and pays quarterly.
iShares U.S. Technology ETF
Total portfolio weightage: 11.4%
iShares U.S. Technology ETF (NYSE:IYW) is a low-yield ETF that exposes investors to U.S. technology stocks. The fund’s notable holdings include Apple, Microsoft, Nvidia, Broadcom and Meta Platforms. The ETF has a dividend yield of just 0.3% because it’s a growth fund, with technology companies having no or low dividend yields. The ETF is up about 32% so far this year.
iShares Russell 1000 Value ETF
Total portfolio weightage: 3.9%
The iShares Russell 1000 Value ETF (IWD) accounted for about 3.9% of the total portfolio of the investor making $5,180 per month in dividends. IWD tracks U.S. stocks that the fund considers relatively undervalued. Some of the top stocks in its portfolio include Berkshire Hathaway, JPMorgan, ExxonMobil, Walmart and UnitedHealth, among others.
iShares Russell 1000 Growth ETF
Total portfolio weightage: 3.5%
The iShares Russell 1000 Growth ETF (IWF) tracks the Russell 1000 Growth Index and provides investors with exposure to growth stocks from the technology, consumer discretionary and health care sectors. It yields less than 1% and has gained about 32% so far this year.
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3M
Total portfolio weightage: 3.3%
Industrial conglomerate 3M Co (NYSE:MMM) was among the top three dividend payers in the investor’s portfolio, earning $5,180 per month. His portfolio screenshots showed 3M brought in $3,695 in annual dividend income. However, 3M’s impressive 64-year consecutive dividend growth streak ended earlier this year after the company reduced its dividend following the spinoff of its health care business.
AbbVie
Total portfolio weightage: 2.4%
With a current dividend yield of 3.2%, AbbVie Inc. (NYSE:ABBV) was one of the important dividend stocks in the Redditor’s portfolio, making $5,180 a month.
Verizon Communications
Total portfolio weightage: 1.9%
With an over 6% yield and 18 consecutive years of dividend growth, Verizon Communications Inc. (NYSE:VZ) is a popular dividend stock among income investors. The Redditor, earning $5,180 in monthly dividends, has 1.9% of his total investments in the company.
Intel
Total portfolio weightage: 1.5%
Down 47% so far this year, Intel (INTC) has a dividend yield of about 2.2%. About 1.5% of the portfolio generating $5,180 per month in dividends was allocated to Intel. The stock recently increased after the Biden administration reportedly finalized $7.86 billion in direct funding for the company as part of the CHIPS and Science Act.
Realty Income
Total portfolio weightage: 1.5%
Realty Income (O) is one of the world’s most popular monthly dividend stocks, yielding 5.5%. The company has raised its payouts for 30 straight years. O accounted for about 1.5% of the investor’s total portfolio, raking in $5,180 per month in dividends.
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