Investors invest in dividends to increase wealth and balance their portfolios for growth to avoid risk. Dividend stocks have proven their worth during market downturns and volatility in the past. Data shows that the Mergent index of dividend growth stocks was 20% lower than the S&P 500 over a 10-year period.
About two years ago, the investor shared his detailed earnings reports, stories and portfolio screenshots on r/Dividends, an investor discussion board with more than 622,000 members. His portfolio records showed that he collected $62,193 in annual dividends or $5,183 per month.
The investor, 49, said he had been looking at growing ETFs for 25 years but switched to dividend investing in the last three years.
The user’s portfolio displays 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.
He was asked how he was able to accumulate wealth to earn money. He said that he had worked in high-paying jobs and also started businesses (software sales):
“Owning a business comes with risks, but it also creates a lot of economic opportunity through tax and savings and income distribution methods.”
“The first job out of college was $27,300/yr. I signed up for my company’s 401(k) plan and that’s where I started. Little by little it adds up, especially if it’s just being (re)funded.”
He said even the distribution of income from growth ETFs has been a “boon” for his investment portfolio.
Let’s look at some of the biggest holdings of the dividend portfolio.
Vanguard Total Stock Market ETF
Total portfolio weight: 46.6%
The investor’s largest position was the Vanguard Total Stock Market ETF (VTI), which earned $5,180 per month in dividends and accounted for 46.6% of his total portfolio. Vanguard Total Stock Market ETF gives investors access to the entire stock market, as its portfolio consists of 3,600 small, mid and large-cap stocks. It pays dividends quarterly and has a yield of 1.4%.
History of the Vanguard Total International Stock ETF
Portfolio weight: 14.2%
The second largest investor holding was the Vanguard Total International Stock ETF (VXUS), which earned $5,800 per month in dividend income. This fund gives investors access to foreign investment opportunities outside of the US. VXUS pays a dividend of 2.4% and pays dividends.
iShares US Technology ETF
Total portfolio weight: 11.4%
The iShares US Technology ETF (NYSE:IYW) is a low-yield ETF that exposes investors to US technology stocks. The fund’s notable holdings include Apple, Microsoft, Nvidia, Broadcom and Meta Platform. The ETF has a dividend yield of only 0.3% because it is a growth fund, with technology companies that have no low yield. The ETF is up about 32% so far this year.
iShares Russell 1000 Value ETF
Portfolio weight: 3.9%
The iShares Russell 1000 Value ETF (IWD) accounted for about 3.9% of the investor’s total portfolio making $5,180 a month in shares. IWD tracks US stocks that the fund considers 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 weight: 3.5%
The iShares Russell 1000 Growth ETF (IWF) tracks the Russell 1000 Growth Index and offers investors access to growth stocks from technology, consumer discretionary and health care. It yields less than 1% and has gained 32% so far this year.
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3M
Portfolio weight: 3.3%
Industrial conglomerate 3M Co (NYSE: MMM ) was among the top three paying shareholders in the investor’s portfolio, earning $5,180 per month. His portfolio shows showed 3M brought in $3,695 in revenue for the fiscal year. However, 3M’s remarkable 64-year streak of dividend growth ended earlier this year after the company cut its dividend following the exit of its healthcare business.
AbbVie
Portfolio weight: 2.4%
With shares up to 3.2% distributed, AbbVie Inc. (NYSE:ABBV) was one of the most important shares in the Redditor’s portfolio, making $5,180 per month.
Verizon Communications
Portfolio weight: 1.9%
With a yield of over 6% and 18 consecutive years of dividend growth, Verizon Communications Inc. (NYSE:VZ) is a popular dividend stock among investors. The Redditor, who earns $5,500 in monthly dividends, has 1.9% of his total income in the company.
Intel
Portfolio weight: 1.5%
Down 47% so far this year, Intel (INTC) has a 2nd quarter share. About 1.5% of the portfolio generates $5,180 per month in shares allocated to Intel. Stocks only increased after the Biden administration spent $786 million in direct funding to the company as part of the CHIPS and Science Act.
Realty Income
Portfolio weight: 1.5%
Realty Income (O) is one of the most popular monthly dividend stocks, yielding 5.5%. The company has raised its payout for 30 straight years. O accounted for about 1.5% of the total customer base, taking in $5,180 a month in shares.
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This 49-year-old author makes $5,180 a month in dividends with ‘Helps Me Sleep At Night’ Portfolio – Top 10 Stocks You Can’t Miss appeared first on Benzinga.com
