How much invested to make $1,000 a month?
Calculate the Investment Needed: To earn $1,000 per month, or $12,000 per year, at a 3% yield, you'd need to invest a total of about $400,000. Calculation: $12,000 / 0.03 = $400,000.
The truth is that most investors won't have the money to generate $1,000 per month in dividends; not at first, anyway. Even if you find a market-beating series of investments that average 3% annual yield, you would still need $400,000 in up-front capital to hit your targets. And that's okay.
If you invest $1,000 per month, you'll have $1 million in 25.5 years. Data source: Author's calculations.
Too many people are paid a lot of money to tell investors that yields like that are impossible. But the truth is you can get a 9.5% yield today--and even more. But even at 9.5%, we're talking about a middle-class income of $4,000 per month on an investment of just a touch over $500K.
The rule of thumb is that you can make about 4% annually off of investments without draining the principal. So if you have $600k you can take out $2,000 a month indefinitely. Of course this is an average, and could go up or down depending on the year, so you might want to have a bit of cushion.
- Coca-Cola (KO) Source: Coca-Cola. ...
- Chevron (CVX) Source: LesPalenik / Shutterstock.com. ...
- Schwab US Dividend Equity (SCHD) Source: iQoncept/shutterstock.com.
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.
With the $1,000 per month rule, if you plan to withdraw 5% of your savings each year, you'll need at least $240,000 in savings. If you aim to take out $2,000 every month at a withdrawal rate of 5%, you'll need to set aside $480,000. For $3,000, you would aim to save $720,000.
You'll need to invest $12,600 per month and earn a 10% annual return to become a millionaire in 5 years. That's matching the average stock market return.
Investing just $100 a month over a period of years can be a lucrative strategy to grow your wealth over time. Doing so allows for the benefit of compounding returns, where gains build off of previous gains.
How can I make $500 a month at home?
- Build a blog of your own to make $500 extra each month. ...
- Complete paid online surveys from your home. ...
- Join a focus group to make $100 an hour. ...
- Sell printables on Etsy. ...
- Sell templates online. ...
- Become a bookkeeper and work from home. ...
- Create an online store. ...
- Sell items on Amazon.
Dividend-paying Stocks
Shares of public companies that split profits with shareholders by paying cash dividends yield between 2% and 6% a year. With that in mind, putting $250,000 into low-yielding dividend stocks or $83,333 into high-yielding shares will get your $500 a month.
And at a 6% yield, the portfolio size needed to live off dividends reduces to $989,733.33.
Stock | Market Capitalization | 12-month Trailing Dividend Yield |
---|---|---|
Ellington Financial Inc. (EFC) | $905 million | 16.5% |
Gladstone Investment Corp. (GAIN) | $500 million | 6.9% |
Modiv Industrial Inc. (MDV) | $112 million | 7.7% |
LTC Properties Inc. (LTC) | $1.3 billion | 7.2% |
But it is possible to live well even on a small amount of money. Surviving on $1,000 a month requires careful budgeting, prioritizing essential expenses, and finding ways to save money. Cutting down on housing costs by sharing living spaces or finding affordable options is crucial.
Living on $2,000 per month is doable, but you won't be able to live just anywhere. This is important because at the time of writing the average Social Security benefit paid is $1,701 per month.
Rock-solid dividend stocks
Kinder Morgan, Equinix, and Lockheed Martin pay safe dividends and earn contractually secured revenue, enabling them to produce predictable cash flow. On top of that, they have very strong balance sheets. Those features make them some of the most bankable dividends for 2024 and beyond.
Ticker | Name | Dividend Safety |
---|---|---|
ENB | Enbridge | Safe |
EPD | Enterprise Products Partners | Safe |
WHR | Whirlpool | Borderline Safe |
VZ | Verizon | Safe |
The highest analyst price target is $70.00 ,the lowest forecast is $60.00. The average price target represents 10.87% Increase from the current price of $59.53. What do analysts say about Coca-Cola? Coca-Cola's analyst rating consensus is a Moderate Buy.
$3,000 X 12 months = $36,000 per year. $36,000 / 6% dividend yield = $600,000. On the other hand, if you're more risk-averse and prefer a portfolio yielding 2%, you'd need to invest $1.8 million to reach the $3,000 per month target: $3,000 X 12 months = $36,000 per year.
What is the best thing to invest right now?
- High-yield savings accounts. Overview: A high-yield online savings account pays you interest on your cash balance. ...
- Long-term certificates of deposit. ...
- Long-term corporate bond funds. ...
- Dividend stock funds. ...
- Value stock funds. ...
- Small-cap stock funds. ...
- REIT index funds.
A second high-yield stock capable of producing $100 in super safe monthly dividend income in 2024 from an initial investment of $11,925 (split three ways) is business development company (BDC) PennantPark Floating Rate Capital (NYSE: PFLT).
This money will need to last around 40 years to comfortably ensure that you won't outlive your savings. This means you can probably boost your total withdrawals (principal and yield) to around $20,000 per year. This will give you a pre-tax income of $35,000 per year.
If you start collecting your benefits at age 65 you could receive approximately $33,773 per year or $2,814 per month.
Type of beneficiary | Percent of total payouts | Average monthly benefit |
---|---|---|
Source: Social Security Administration, December 2023 | ||
All recipients | 100% | $1,767.03 |
Retirement benefits | 78.6% | $1,856.38 |
Retired workers | 74.8% | $1,905.31 |
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