As a Marine of over 21 years, I know that my military pension will be substantial. In fact, my wife and I can easily live off of this retirement alone. On top of our military pension, we will also have rental income from our properties. To be honest, we are pretty much set for retirement. However, we continue to grind towards a dream of retiring with a dividend income portfolio. What are dividends? Dividends are a share of a companies profits. They are paid to you if you own that company’s stock.
I first learned about dividends in June of 2019. I was so fascinated by the idea of being paid while chilling on the beach that I immediately committed to building a dividend portfolio. I received my first 2 dividends in August and September of 2019. First was Papa John’s for $0.23 and the other was Intel for $0.95. I was so proud of myself for earning those dividends. A year later, we are routinely earning $160 a month from dividends and interests.
Why do we need dividends to supplement retirement? Having another form of truly passive income is a luxury that is not afforded to most. As much as I will enjoy passively earning money from my military pension there is one thing that keeps it from being perfect; it will not be passed down to my children. My 30 years of hard work will disappear along with me and my wife. The only way to keep this legacy going is to convert this money into assets such as businesses, real estate, and stocks. Also, I want to be extremely comfortable in retirement. Why limit yourself to a defined fixed income when you can do so much more?
My goal is to have $100,000 a year in dividend income. This will take a lot of money invested in the stock market. Assuming a 3% dividend yield, I would need $3,333,333 to receive that $100,000. (The math behind this is 100,000/.03). As you can see, I will need a ton of money invested. I don’t expect to hit this number until my 60s. Which is fine because we will be comfortable until we get there. In the meantime, we need to budget, save, invest, and generate multiple streams of income to meet our goals. The best part of our dividend portfolio is that we can leave the complete portfolio to our children. That alone will be worth all the hard work and dedication.
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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