Dividends can be used to cover monthly expenses or reinvested to compound returns. Earning $5,000 per month ($60,000 per year) from dividends is feasible but typically requires a diversified portfolio rather than a single holding. The recommended allocation is 80% to high-yield, diversified ETFs and 20% to single-stock funds to balance risk and return. Example ETF choices include NEOS NASDAQ-100 High Income ETF (QQQI) and Invesco KBW High Dividend Yield Financial ETF (KBWD). Achieving $5,000 monthly from a $500,000 portfolio implies targeting about a 12% annual yield, acknowledging yield and expense trade-offs.
I strongly believe investing is about making your money work for you. When I invest in any asset, I look for the ways it will grow my money, and one of the most important is dividends. I use the dividends to cover monthly expenses and sometimes reinvest them. If you're also looking to make money from stocks, earning a dividend of $5,000 a month or $60,000 a year is possible. But, there's a catch.
High-yield ETFs You've to allocate 80% of the capital to diversified ETFs. You can divide 40% each in two ETFs, namely, the NEOS NASDAQ-100 High Income ETF (NASDAQ:QQQI) and the Invesco KBW High Dividend Yield Financial ETF (KBWD). They are highly diversified funds with an impressive yield. In order to generate a passive income of $5,000 a month, you'll need to achieve a 12% annual yield on an investment of $500,000. QQQI has a distribution rate of 14.65% and an expense ratio of 0.68%.
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