By coryanne hicks contributor jan. How most people live off dividends.
If you wanted to generate 60k in dividends a year at a more realistic 3 dividend yield you d need a portfolio worth around 2 000 000.
How much money in stocks to live off dividends. 14 2020 by coryanne hicks contributor jan. Now before you despair and dismiss the possibility of ever living off of dividends there are several tricks to seriously reduce how much you need. If you have 100 000 to invest you would receive approximately 4 000 in annual dividend income.
Thoughts on the amount of money needed to live off dividend income one thing you may have noticed is that it will take a lot of money to create an income you can live off of solely from dividends. 14 2020 at 3 04 p m. It s important to remember that companies are always trying to increase their income and in turn their stock price.
Assume the stock price doesn t move much but the company increases its dividend by 6 a year. But think of it this way. To live on dividend income you need to know how much income and which investments you need.
If you are 30 years old and can generate a 1 million portfolio in 25 years then you can retire and live off dividends at the age of 55. If your goal is to receive 50 000 in passive dividend income you would need to invest approximately 1 25m in pfg stock. Not bad but it s pretty much impossible to live off of 4 000 a year.
In the second year you will get a dividend yield of 3 18 on 103 000 for a dividend of about 3 275. So starting earlier and saving more are the best things you can do if you want to live off dividends in the future.