$100 Dividends Monthly? How You Can Achieve It
More investors are turning to stable sources of passive income like dividends, fund distributions, or rental income. The key advantage? Your invested money works for you. While you continue earning from your regular job, your investments generate additional income on the side. In this article, we’ll show you how to achieve $100 in monthly dividends using dividend stocks and ETFs, an excellent starting point for beginners or those building a passive income stream.
Steps to Reach $100 Dividends Monthly
To generate $100 in monthly dividends, follow these steps:
1. Determine Your Target Dividend Yield
The first step is finding out the dividend yield of the stocks or ETFs you’re considering. The dividend yield tells you the percentage of your investment that will be returned to you as dividends.
2. Calculate the Required Capital
Once you know the average dividend yield, divide your target monthly dividend ($100) by the yield to figure out how much you need to invest.
Example: If your portfolio’s average dividend yield is 4%, you’ll need an investment of $30,000 ($1,200 annual dividend / 0.04).
5 Top Dividend Stocks and ETFs
Here are five dividend stocks and ETFs that can help you generate $100 in monthly dividends:
1. Johnson & Johnson Dividend Stock
Johnson & Johnson (ISIN: US4781601046) is a leader in pharmaceuticals, healthcare, and consumer goods. With 62 consecutive years of increasing dividends, it is a “Dividend King.” The current dividend yield is around 3.32%, and Johnson & Johnson pays an annual dividend of $4.96 per share, distributed quarterly.
2. Procter & Gamble Dividend Stock
Procter & Gamble (ISIN: US7427181091) is another “Dividend King,” with 69 consecutive years of dividend growth. The company offers a dividend yield of 2.6% and pays an annual dividend of $4.03 per share. Procter & Gamble is known for its stability, making it a good choice for investors seeking steady income.
3. Vanguard FTSE All-World High Dividend Yield ETF
This ETF (ISIN: IE00B8GKDB10) provides global exposure to high-dividend stocks. With a dividend yield of about 3.5%, this ETF offers diversification across different sectors and regions, reducing risk while providing a steady income.
4. Realty Income Dividend Stock
Realty Income (ISIN: US7561091049), known as “The Monthly Dividend Company,” is a REIT that pays dividends monthly. It has a dividend yield of approximately 4.2%, making it an attractive option for investors seeking consistent monthly income. Its focus on commercial properties with long-term leases provides stability.
5. iShares MSCI Emerging Markets Dividend ETF
This ETF (ISIN: IE00B8GKDB10) focuses on dividend-paying stocks from emerging markets, offering a dividend yield of about 4%. It combines the potential growth of emerging markets with attractive dividends, making it a good choice for investors seeking both income and growth potential.
Calculating $100 Dividends a Month
Example Calculation for $100 Monthly Dividends:
- Dividend Yield: 4%
- Desired Dividend: $1,200 annually ($100 monthly)
- Required Capital: $1,200 / 0.04 = $30,000
| Investment | Dividend Yield (%) | Required Capital Without Taxes ($) |
|---|---|---|
| Johnson & Johnson | 3.32 | $36,144.58 |
| Procter & Gamble | 2.6 | $46,153.85 |
| Vanguard ETF | 3.5 | $34,285.71 |
| Realty Income | 4.2 | $28,571.43 |
| iShares ETF | 4.0 | $30,000.00 |
This table shows how much capital you need to invest in each stock or ETF to earn $100 in dividends each month. Be mindful of taxes, which can reduce your net dividend income, so it’s important to include taxes in your financial planning.
By selecting the right mix of dividend stocks and ETFs, you can build a stable and growing source of passive income.
Conclusion: Achieving $100 in Monthly Dividends
Earning $100 in monthly dividends is a feasible goal, especially for beginner investors. By analyzing dividend yields and calculating the required capital, you can create a clear and achievable plan. Remember to account for taxes, as they will impact your final dividend income.
The stocks and ETFs mentioned above provide a solid starting point for building a reliable dividend portfolio. Regularly reviewing your investments and making adjustments will help you stay on track to meet your passive income goals.
FAQs: Earning $100 in Dividends Monthly
1. How long will it take to generate $100 in monthly dividends?
The timeline to achieve $100 in monthly dividends depends on your initial investment capital, the dividend yields of your chosen investments, and whether you reinvest dividends. By regularly contributing to your investment portfolio and selecting competitive yields, you can shorten the time needed to achieve this goal.
2. Should I reinvest my dividends or take them as cash?
Reinvesting dividends can accelerate your portfolio’s growth over time due to compounding. However, if you need the cash flow for living expenses, taking dividends as cash may be the better choice. Many investors reinvest dividends while building their portfolio and switch to cash dividends later when they need the income.
3. How do taxes impact my dividend income?
Dividend income is generally taxable, but the tax rate depends on whether the dividends are qualified or ordinary. Qualified dividends are taxed at a lower capital gains rate, while ordinary dividends are taxed as regular income. Consult a tax professional to understand how taxes will impact your specific dividend strategy.
4. Can I live off $100 in monthly dividends?
While $100 a month may cover small expenses, it’s unlikely to replace your income. However, it can be a stepping stone toward building larger streams of passive income. Many investors start with smaller goals, like $100 in dividends, and gradually work their way toward more substantial amounts, such as $500 or $1,000 per month.
5. Is $100 monthly dividends realistic for beginner investors?
Yes, $100 in monthly dividends is a realistic goal, even for beginner investors. It requires time, patience, and disciplined investing. Start by contributing regularly to your portfolio, selecting stable dividend-paying stocks or ETFs, and reinvesting your dividends to grow your investment faster.
Important Disclaimer
This article is not intended to provide financial advice. The examples provided are for educational purposes only and should serve as a starting point for your own research. Always do thorough research and consider consulting a financial advisor before making any investment decisions. We disclaim any liability for financial losses that may arise from investments made based on this article. All investments carry risk, and you should be aware of your risk tolerance and financial objectives before investing.
