If you’re considering investing in dividend stocks, the rate of return can vary greatly depending on your investment’s current maturity. It is important to know what your potential yields could be if you have a long-term focus and hold onto those shares until they mature.
The “dividend calculator” is a tool that allows users to find out how much they can make in dividends with $100K. The tool allows the user to input their annual dividend, and it will tell them what percentage of their portfolio would be dividends.
Options for a $100,000 Dividend Stock Investment
The goal of this post is to explore how much money you can generate in dividends with a $100,000 investment. And show you how to do it with a variety of dividend portfolio alternatives.
Perhaps you’ve made some money. And you’d want to put it into dividend stocks. If that’s the case, congrats!
Or maybe you’re ready to get serious about saving. To amass a dividend stock portfolio worth $100,000.
Let’s get today’s investment adventure began, regardless of your position. And see how much you can make with $100k in dividends…
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With $100K, how much can you make in dividends?
The actual amount of dividends you may obtain with $100k is determined on the dividend yield of your portfolio.
Allow me to use a table to illustrate this concept. Representing a variety of possibilities…
Table 1: Dividend Income Potential From A $100,000 Dividend Stock Portfolio
|Yield on Portfolio Dividends||$100K in dividends|
This leads to a reasonable inquiry.
If Yield on Portfolio Dividends dictates the dividend income from a $100,000 investment in dividend stocks.
So, what exactly is this concept?
Please bear with me while I explain…
What Is Yield on Portfolio Dividends And How Is It Calculated?
To begin, the dividend yield of a portfolio is the weighted average dividend yield of the individual stocks held.
It’s computed by summing all of the dividend income from each stock you own over the course of a year. And then multiplying it by the portfolio’s entire market value.
Furthermore, the dividend yield of each of your stock purchases will have an impact on the total yield of your portfolio.
As a result, the stocks you pick are crucial. Because they’ll eventually decide how much money you earn back from your $100,000 investment in dividends.
Finally, any company that intrigues you may be researched for its dividend yield. It is simple and fast to do so online.
For the record, the current annual dividend rate per share divided by the stock price yields the dividend yield of a company.
Okay. With that background information in mind, let’s look at several options. With entirely different Yield on Portfolio Dividendss.
As a result, from your $100,000 investment, each option will provide a different amount of dividends…
Option 1: A $100,000 dividend portfolio with a lot of growth and little income
First, we’ll look at Dividend Aristocrats in this dividend portfolio example.
Aristocrats are stocks that are part of the S&P 500 stock market index. And have also paid and increased their dividends per share for at least 25 years in a row.
The dividend yields on these equities are often lower. However, they raise their payouts every year. As a result, they are classified as dividend growth stocks.
Here’s a Dividend Aristocrats model portfolio…
Table 2: Dividend Aristocrat Stocks With A $100K Investment
|Data Processing by Machine (ADP)|
|Exxon Mobil Corporation (XOM)|
|Hormel Foods, Inc. (HRL)|
|Johnson & Johnson (JNJ)|
|McCormick & Company (MKC)|
|McDonald’s is a fast food restaurant chain (MCD)|
|Energy company NextEra (NEE)|
|Procter & Gamble (PG)|
|Rental Income (O)|
Based on my experience, an ordinary investor like you or me can put up a $100,000 portfolio completely from the Dividend Aristocrats list.
By picking 10 or so stocks among the more than 60 Aristocrats now available.
By doing so, expect a Yield on Portfolio Dividends of about 2%. Maybe a little more or less. Depending on the exact stocks you select.
We know this because of table #1. A $100K dividend portfolio with a 2% yield will pay out $2,000 in dividends each year.
Dividend income is about $200 each month. Not quite, but near enough.
That seems reasonable. However, you could be searching for a higher level of dividend income. And I’m not sure I blame you.
So, let’s take a look at another $100,000 dividend stock portfolio alternative…
Option 2: Investing $100,000 in higher-yielding dividend stocks
We’re going to look for firms with greater dividend yields this time.
We know that firms with greater dividend yields will boost our total portfolio yield. As a result, the value of dividends earned from a $100,000 investment has increased.
I went to my portfolio to accomplish this. And I looked for companies with a 5-percent yield.
This is the result of my brainstorming…
Table 3: $100K Invested In Dividend Stocks With Higher Yields
|Altria Group (MO)|
|Enbridge Inc. (ENB)|
|Verizon Wireless (VZ)|
|Carey, W.P. (WPC)|
|Morris, Philip (PM)|
|GlaxoSmithKline is a pharmaceutical company (GSK)|
|Machines for International Business (IBM)|
|Walgreens is a drugstore chain (WBA)|
|Company 3M (MMM)|
Now, imagine having a $100,000 dividend portfolio like this. Approximately 5% yield.
Depending on your precise stock selections, it might be a bit more or a little less. And the amount of money you put into each stock.
Dividends are worth $5,000 each year.
Furthermore, you may improve your stock selection by being more aggressive. And limiting your investment selections to to those with the best yields. Then $6,000 per year is a distinct possibility.
Dividend income of $500 per month is possible with that yearly amount. A pleasant round number.
So, what’s the problem with this approach?
Why would anybody invest in companies that pay out just 2% in dividends? When dividend yields of 5% are available.
That is an excellent question! The answer is…
Growth is limited, and dividends are less secure.
Because higher-yielding equities develop more slowly. Less capital appreciation is available. Also, dividend growth is slower.
Their payouts might potentially be more risky.
As a result, there’s a higher chance of little or no dividend increase. Or, in the worst-case scenario, a dividend cut.
Want to look for stocks with better yields? If so, you may use an internet tool to do a similar task. I’m looking for companies with dividend yields of 4% to 6%.
My favorite is the Simply Investing Report & Analysis Platform.
Simply Investing has a searchable database. With hundreds of dividend stocks and their dividend metrics.
Also included are suggestions for the best dividend stocks to purchase. When should you purchase them?
Let’s take a look at another dividend stock investment choice for our $100,000 dividend stock portfolio…
Option 3: Invest $100K in a Closed-End Fund to Increase Dividends
We’re looking for huge dividend income this time. Consider investing in a closed-end fund.
Mutual funds that are closed-end are a form of mutual fund. They sell a predetermined amount of shares in an initial public offering.
Professional managers make investment judgments. And, like stocks on the stock market, fund shares may be purchased and sold.
Closed-end funds are available for a wide range of assets and investing strategies. They may also generate dividend income via aggressive techniques.
- Borrowing money to invest (using leverage)
- Stock options trading
- To generate cash for dividends, you may sell appreciated stock.
- Using techniques to collect dividends
Voya manages one of these types of funds. Their Emerging Markets High Dividend Equity Fund is the product (ticker symbol IHD).
Note to editors: I do not and have never owned this fund. I also don’t suggest it. I’m only using it as an illustration.
Because the dividend yield on this fund is a stunning 10% as of the date of this article.
As a result, a $100,000 investment in IHD will yield $10,000 in yearly dividends.
But! You knew there would be a but, right?
Be Wary of High-Dividend-Paying Aggressive Funds
For starters, closed-end funds like this have a higher investment risk.
Second, capital returns are sometimes included in dividend payouts. Not in the usual meaning of the word.
As a consequence, these sorts of funds, in my experience, may get pummeled. Especially during bear markets and economic downturns.
They also charge more money. vs exchange-traded funds that are passively managed (ETFs).
When it comes to fees and investment expenditures, Make sure your dividend stocks and ETFs are free to acquire and sell.
I utilize the Webull app to do so. It’s quick, free, and provides excellent research and trading features.
To summarize, closed-end funds with high yields are an alternative.
For an investment, one or more of these may be beneficial. Who wouldn’t like to make $10,000 per year from a $100,000 diversified dividend portfolio? They may, however, be highly volatile.
Finally, for your $100,000 dividend portfolio building consideration, here’s another option…
Option 4: On a $100,000 investment, use a hybrid strategy for dividends.
The first two options are not mutually exclusive. Because you can combine aspects from both.
To make your $100k dividend portfolio unique. And then create the portfolio yield that you want.
Invest in a few lower-yielding Dividend Aristocrats, for example. Choose a few companies with dividend yields between 4% and 6%. Plus, invest a tiny portion of your savings in a high-yield closed-end fund of your choice.
As a result, portfolio customization. Comprised of the greatest stocks available to satisfy your needs.
Following that, a few frequently asked questions…
Dividend Yield FAQs And A $100,000 Dividend Stock Portfolio
Allow me to answer a few of commonly asked questions (FAQs) about dividend yield before I wind up.
Because so much of today’s conversation about a $100,000 portfolio focuses on it…
Is A High Dividend Yield Beneficial Or Harmful?
High dividend yields are neither desirable nor bad in my opinion. They’re usually a sign of equities that have a higher dividend risk, slower dividend growth potential, or both.
What Does A Good Dividend Yield Look Like?
A strong dividend yield is one that is sufficient to fulfill your dividend income needs. But not so high that dividend security and future dividend payments are jeopardized.
Dividend yields with the finest features, in my view, often lie between 3% and 5%.
With $100K, how much can you make in dividends?
So, if you’ve been thinking to yourself, “How much can I collect in dividends with $100k?”
And I’ve been considering putting up a $100K dividend portfolio with several dividend firms.
Then I hope you found today’s article interesting. And it was beneficial.
Check out all of our… before you go.
Tips and Articles on Dividend Stocks and Dividend Investing
…ideal for honing your dividend investment skills! Additionally, you may increase your dividend income.
On a whiteboard, the conclusion is written.
Disclosure & Disclaimer: I am not a licensed investment adviser, financial adviser, or tax professional. And I am not providing you with individual investment advice, financial guidance, or tax counsel. Furthermore, this website’s only purpose is information & entertainment. And we are not liable for any losses suffered by any party because of information published on this blog.
Explanation of Dividend Income From A $100,000 Dividend Portfolio
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