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As inflation continues to fall and the Fed’s rate-cutting cycle continues, investors are looking for reliable dividend stocks to grow their wealth. But making decent money from dividends on a budget isn’t easy. Let’s look at a success story where a young investor started with small investments and achieved a reasonable income goal in just two years.
About two years ago, an investor shared his story on r/Dividends, a Reddit discussion board with more than 580,000 members interested in dividend investing. He started investing during the pandemic with just $100 deposits.
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“That’s when I decided to take things seriously and started investing a fair percentage of my income,” he said.
According to the portfolio screenshots he shared publicly, the investor earned just $15 in dividends in 2020, and his annual income rose to $966 in 2022. In 2021, his dividend income was $305. This shows the power of compounding and making it work for you of money.
The investor, who said he was 28 years old, was asked how much he had invested to reach this income level. This is what he said:
“50,000 invested, 2-3,000 per month in 2022, less in previous years.”
While $1,000 a year isn’t a lot, it’s a great start for people who want to start investing for income with small contributions from their salary or savings.
The Redditor also shared his stock portfolio with fellow investors. Let’s take a look at the biggest holdings in his portfolio.
Real estate income
Realty Income Corp (NYSE:O) was the largest position in the Redditor’s portfolio, earning about $1,000 in dividends per year. According to the screenshots shared by the investor, Realty Income Corp (NYSE:O) accounted for about 9.9% of the total portfolio. Realty Income Corp (NYSE:O) yields about 5% and pays a monthly dividend.
Apple
With more than $160 billion in cash and more than a decade of consecutive dividend increases, Apple Inc. (NASDAQ:AAPL) has become a major dividend-paying stock that investors are paying attention to. However, the stock yields only 0.44%. It is up about 297% over the past five years.
Microsoft
Last month, Microsoft Corp (NASDAQ:MSFT) increased its quarterly dividend by 10%. It pays a dividend per share of $0.83. Microsoft Corp (NASDAQ:MSFT) is one of the best stocks for dividend income and capital gains through price appreciation. MSFT is up 32% in the past year.
Deer Industrial
Stag Industrial (NYSE:STAG) is an industrial REIT that pays monthly dividends. The dividend yield is approximately 3.6%. The Redditor said that about 7.5% of his dividend portfolio is allocated to this stock.
JPMorgan Chase
JPMorgan Chase & Co (NYSE:JPM), one of the largest banks in the world, has a dividend yield of about 2.4% and has increased its payouts every year since 2009. It was one of the Redditor’s largest holdings, earning around $1,000 in revenue. dividends.
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Visa
Payments giant Visa Inc (NYSE:V) is another dividend stock that investors look to for both dividend income and price gains. Visa Inc (NYSE:V) has increased its payouts for 16 years in a row. The stock is up 21% in the past year. Last month, BNP Paribas upgraded Visa (NYSE:V) to Outperform, citing free cash flow and valuation.
Costco Wholesale
Costco Wholesale Corporation (NASDAQ:COST) is another safe, low-yield dividend stock in the Redditor’s portfolio. The retailer has increased its payouts for 20 years in a row. The company recently published quarterly results with profits exceeding expectations, while revenue lagged behind market expectations. Comparable sales rose 6.9% in the quarter, better than market estimates of 6.4%. Costs have increased by 54% in the past year.
Johnson & Johnson
About 7.8% of the Redditor’s portfolio was allocated to Johnson & Johnson (NYSE:JNJ). The company has increased its dividends without interruption for more than sixty years.
VICI properties
Casino and entertainment REIT VICI Properties Inc (NYSE:VICI) was among the high-yield dividend stocks in the portfolio. The share has a dividend yield of 5.3%. Last month, VICI Properties Inc (NYSE:VICI) increased its dividend by about 4%.
McDonald’s
Last month, McDonald’s Corp (NYSE:MCD) increased its dividend, marking the 48th consecutive year of dividend increases. The news was welcomed by investors amid growing concerns about slowing traffic at the fast-food chain due to rising inflation. McDonald’s Corp (NYSE:MCD) launched $5 meals to attract customers. BTIG analyst Peter Saleh recently noted that these initiatives are working, as the company’s comparable sales turned positive in August and September.
AbVie
With more than 50 years of consecutive dividend increases and a dividend yield of more than 3%, AbbVie Inc (NYSE:ABBV) has been a key stock in the 28-year-old Redditor’s portfolio. AbbVie Inc (NYSE:ABBV) accounted for approximately 7.1% of the total portfolio.
Wondering if your investments could earn you a $5,000,000 nest egg? Talk to a financial advisor today. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your region, and you can interview your advisors for free to decide which one is right for you.
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This multi-billion dollar fund has invested in the next big real estate boom, Here’s how you can participate for $10.
This is a paid advertisement. Please consider the Fundrise Flagship Fund’s investment objectives, risks, charges and expenses carefully before investing. You will find this and other information in the The prospectus of the fund. Read them carefully before investing. -
By allocating just 5% of your portfolio to this asset class, you can achieve big returns. Should you invest in visual arts?
This article This 28-Year-Old’s Dividend Income Soared From ‘$15 to $1,000’ in Just Two Years – The Top 11 Dividend Stocks in His Portfolio originally appeared on Benzinga.com
