Earning $36,000 a Year In Dividends: Going from Active to Passive Income

I joined the workforce in 1996 and worked until 2023. According to my Social Security earnings record, I didn’t start earning $36,000 a year until 2010—that’s 15 years. 

Those were some tough but fun years in the United States Marine Corps. Back then, I would not have ever imagined I could earn $36,000/year without lifting a finger.

I am ecstatic that my dividend portfolio crossed the $36,000/year milestone. I am earning a pretty decent living wage without exchanging time for money, and my life couldn’t be better.

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How did I arrive at this point? And, more importantly, how can you replicate my success in the dividend arena? All these questions ahead, and more. Let’s begin.

Earned income vs. passive income. Understanding the difference between earned income and passive income is the first step to realizing your dream retirement and lifestyle.

Earned income is what your parents taught you to chase (like mine). In this case, your time and body are the assets that generate a return on your investments. 

The military pay chart doesn’t tell the full story about how much we earn. In addition to basic pay, the military provides living spaces and food for its members.

I never complained about my military pay and enjoyed the 24 years I spent in the Marines. However, I enjoy my military pension even more.

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When I retired from the military, I converted my earned income into passive income through a military pension.

But you don’t have to join the military to create passive income streams; you only need to buy, build, or create assets.

How to purchase assets. The easiest way to generate passive income is by purchasing stocks from the stock market. Not all stocks will generate income via payouts (called dividends).

Therefore, you must research what stocks and funds pay dividends. This may not sound fun, but it is the best part of the process.

Once you become a dividend investor, you will unlock the potential to generate massive returns from the stock market.

However, dividend investing isn’t for everyone. Some investors seek higher-risk, higher-return profiles from their stocks. In fact, there are many ways to generate some type of return from the stock market (including options trading).

The Stock Market is Not a Wealth Generator

Why I invest in dividends. I favor dividends because they are the most passive type of passive income. My wife and I save and invest our money each month and purchase more dividend stocks.

Therefore, our dividend income increases each month. Many of our stocks raise their dividend payouts annually, giving us a free return on investment. Some dividend stocks pay supplemental or special dividends to increase shareholder value.

I invest in dividends because they make me feel good. Today, I received $143 from AGNC via my Cash App, and my wife received a $100 payment from AGNC on her Cash App.

My wife set her payment aside in her savings account, but I haven’t decided what I want to do with mine. That’s the magic of dividend investing; your choice, your way.

Getting to the nuts and bolts. But enough about my dividend journey; it’s time to start yours. The first question to ask yourself is why you started investing in the first place.

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I started investing because I was tired of being broke. I remember specifically having a $2,000 car emergency in January 2019 and struggling to come up with the cash.

In fact, I had to put it on my nearly maxed-out credit card. That was not a good feeling, and I never wanted to experience it again. That day, I promised myself never to put myself in that position again.

Now, I earn over $3,000/month in dividends. This income helps buffer me from the “shock” of life events that always tend to occur, smoothing out the ride of life.

There are many reasons to start dividend investing: to retire early, to retire in style, to pay for kids’ college, to help with your kids and grandkids, etc. You must find your “why,” and stick to it.

I have not been in such a terrible financial situation as January 2019. Dividend investing has helped me understand the saying “the rich keep getting richer.”

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Why collecting assets is vital. The rich keep getting richer because their assets keep growing in value and, by extension, keep paying more passive income.

Therefore, their stocks are increasing in value, and the dividend payouts are increasing. All this is happening without any further assistance from the investors.

How much work must you put in to go from $40/hour to $45/hour? When your company pays you more, they also expect more from you—that’s the crux of the argument.

The sooner you transition to a passive income mindset, the faster you’ll understand the trap of the workforce and the “earned income” mentality.

It took us six years to go from zero dollars in dividends in June 2019 to $3,000/month in June 2025. Six years isn’t a long time to change your life.

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Are you ready to change? However, we are now completely different people from those 2019 folks. We spend less and read more.

We understand the value proposition of investing today for a return on investment tomorrow. This is called “delayed gratification.”

We received $5,500 from our tax refund this year. Instead of spending it on nonsense, we invested it in my wife’s Cash App account. Over time, she will recoup the entire $5,500 in dividends and then some.

So, how do you value your money and time? Spending what you earn today is much easier than waiting for your assets to pay you tomorrow.

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But, for those with patience, the road ahead looks amazing. Dividend investing leverages the power of compounding to grow your return faster over time.

If you are serious about becoming a dividend investor, read my Dividend Investing 101 series. It is a good place to start for those interested in the process.

1. Dividend Investing 101: What Are Dividends?
2. Dividend Investing 102: Picking the Right Stocks
3. Dividend Investing 103: Picking Your Platforms
4. Dividend Investing 104: Building a Dividend Schedule
5. Dividend Investing 105: Add a Safe Options Trading Strategy
6. Dividend Investing 106: Building a 60/40 Portfolio

Conclusion. What I have learned over six years of dividend investing cannot be taught in school. I learned how to invest in my future by investing in companies and fund managers.

Dividends! Now More Than Ever!

Ultimately, I am in charge of my retirement and lifestyle. What I do today affects what happens tomorrow; therefore, I must take today seriously.

Dividend investing can fund your entire retirement; however, you can add additional passive income streams such as real estate investing, renting rooms, and starting a small business.

Not many people, including Social Security retirees, earn $36,000/year without working. However, you can do exactly what we did by following the same outline.

The quick process is to live below your means, save an emergency fund, and invest in dividends. If you do this over a sustained period of time, you will become wealthy.

Wealth is the difference between income and expenses. You are quite wealthy if you generate enough passive income to cover your expenses. And that’s the goal. Good Luck!

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. 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. All Right Reserved Military Family Investing