The Fastest Way to $1,300 Dividends Per Month

[00:00:00]Reaching $1,300 a month in dividends depends on how much risk you're willing to take. The safest path gets you there in 27 years on a onetime $10,000 investment. Another path gets you there in half the time. In this video, John takes three different paths to turn a one-time $10,000 investment into $1,300 a month in dividend income. One path takes 27 years, one takes 22, and each one trades a different level of risk to get there. And by the end, I'll show you the fastest path that gets John there in just 14 years. All from that same one-time $10,000 investment. Before John picks a single stock, he has to answer one question. And it's not the one most people ask. The question isn't which dividend stock is best. It's not what's the highest yield. It's not even what's the safest. It's simply this. How soon does Jon need the income? Because the answer to that question is what picks the path for him, not the other way around. If Jon needs the money in 10 to 15 years, there's a path built for that.

[00:01:17]And if he can wait 25 to 30 years, well, there's a completely different path that fits. Same $10,000, three different versions of the same plan. Answer it for yourself before the next section. When do you actually need the money to start working? Here's where most people get the math wrong. At a 3% dividend yield, $10,000 should pay $300 a year forever.

[00:01:44]Same number every year for the rest of J's life. That's what the yield tells him on day one. But that's not what actually happens. The same $10,000 keeps paying more every year without Jon ever adding another dollar. That's the engine, and it runs on two things working together. The first is dividend growth. The companies in the portfolio raise their dividend payments every year. So, the cash gets per share keeps going up even if he never buys another share. The second is reinvestment. Every dividend Jon receives buys more shares.

[00:02:20]Those shares pay dividends. Those dividends buy more shares and the pile gets bigger on its own. That's the two cylinder engine every path in this video runs on. The only thing that changes between them is how aggressively Jon runs those engines. Same target, three ways to reach it. Each one asks Jon to take on more risk than the last and gives him something different in return.

[00:02:48]The first path runs the engine slow, the lowest risk of the three. It takes the longest to get Jon to $1,300 a month, which also means it ends up with the biggest portfolio behind that check. The second path runs the engine harder, more income upfront, but the holdings move with the real estate market, which moves differently than the stock market. The third path runs the engine flat out. The highest risk and the fastest income Jon can get. Let's start with the lowest risk because that's the version everything else gets measured against.

[00:03:26]For the lowest risk path, Jon isn't chasing speculative bets or high yield gamles. He's picking companies that have paid shareholders for decades and raised their payments every year while doing it. The best names in this category are called dividend aristocrats. Companies that have raised their dividend every year for at least 25 years straight.

[00:03:47]John's first pick, Abby, ticker symbol ABBV. The pharmaceutical company behind some of the most prescribed drugs in the world, including Humera and Skyrizzy.

[00:03:58]The forward dividend yield sits at 3.21%. The dividend itself has grown 12.05% 05% per year over the last decade. And the share price has appreciated at 12.72% per year on top of that, making it one of the rare names that pays well and grows. Next, John adds PepsiCo, ticker PEP, the company behind Pepsi, Gatorade, Doritos, and Quaker, the kind of products people buy in every economy, in every market cycle.

[00:04:31]PEP pays a higher yield than ABV at 3.93% with dividend growth of 7.31% per year and share price appreciation of 4.13%.

[00:04:41]The trade-off is built into the numbers.

[00:04:44]More income upfront, slower price growth behind it. John rounds it out with Home Depot, ticker HD, one of the biggest home improvement retailers in the US.

[00:04:55]The yield is the lowest of the three at 2.98%, but the dividend growth rate is the highest at 14.14% per year with share price appreciation of 9.07%.

[00:05:08]HD trades current income for the fastest growing dividend in the group. Put all three together, equal weight, and the low-risk portfolio averages out to a 3.37% dividend yield, a dividend growth rate of 11.17% per year, and share price appreciation of 8.64%.

[00:05:30]And that combination is what does the heavy lifting over 27 years. Here's what $10,000 in the low-risk portfolio is projected to grow into. Year 1, the portfolio is projected to sit at $11,23.

[00:05:46]The dividend that year is projected at $337, about $28 a month. Not much to look at.

[00:05:53]Year five, it's projected at $17,789.

[00:05:58]Annual dividends would climb to $593 or around $49 a month. Year 10, the portfolio is projected to reach $32,318.

[00:06:09]The yearly dividend lands at $1,216 or $11 a month. That's John's first three figure monthly check. Year 20, the portfolio is projected to sit at $114,95 with annual dividends reaching $5,491 or $458 a month. Now it's starting to feel real.

[00:06:35]And by year 27, the portfolio is projected to land at $299,580.

[00:06:42]The annual dividend projected at $16,893, which is $1,48 a month. And that is where John crosses the $1,300 a month target. Of the $289,580 added to his portfolio over those 27 years, projections show $175,815 coming from capital appreciation or the share prices going up. The other $113,765 would come from reinvested dividends, buying more shares along the way. At the end, the portfolio is rock solid, but 27 years is a long time to wait. So, here's the question. What if John doesn't have 27 years? What if he needs the income sooner and he's willing to take on more risk to get it? That's what we're going to see next. And in the end, I'll show you the fastest path that reaches the same $1,300 a month in dividends in almost half the time of the low-risk portfolio. But first, let's look at the medium risk path. For this path, John steps into a category most retail investors never even consider. It's called a REIT. Real estate investment trust. And the idea is simple. A REIT is a company that owns real estate warehouses, storage units, shopping centers, apartment buildings. The REIT collects rent from the tenants in those properties. And by law, it has to pay out most of that rental income to shareholders as dividends. That's why REIT yields are higher than regular stocks. John isn't waiting for a company to decide to share its profits. He's getting a slice of the rent. And there are three REITs in this portfolio.

[00:08:36]John's first pick is Cubesmart, ticker symbol Cube. Cubesmart owns self-s storage facilities, those orange and gray unit complexes. John has driven past 100,000 times. Cube pays a 5.29% yield with dividend growth of 10.99% per year and share price appreciation of 2.6%.

[00:08:59]Next, John adds Rexford Industrial, ticker R XR. Rexford owns warehouses and industrial spaces across Southern California, where companies pay a premium rent to be near the ports. The yield is slightly lower than Cubmart at 4.81%, but the dividend has grown faster at 12.63% per year with share price appreciation of 6.41% on top. John rounds it out with Agree Realy, ticker ADC. Agree owns single tenant retail properties, the kind leased to companies like Walmart, Tractor Supply, and Dollar General. long leases, reliable tenants. ADC pays a 4.25% yield with dividend growth of 5.31% per year and share price appreciation of 6.09%.

[00:09:54]This version of the three stock portfolio comes in at a 4.78% blended yield, a 9.64% dividend growth rate, and 5.03% in annual share price appreciation. The yield is noticeably higher than the low-risk portfolio, but the appreciation is roughly half. So, same setup as before, one-time investment of $10,000.

[00:10:20]Here's what that $10,000 in this portfolio is projected to grow into.

[00:10:25]Year 1, the portfolio is projected to sit at $10,982.

[00:10:31]The dividend that year is projected at $478, about $40 a month, already higher than year 1 of the lowrisk portfolio. Year five, the portfolio is projected to reach $16,310.

[00:10:46]Annual dividends would climb to $843.

[00:10:50]Year 10, the portfolio is projected at $28,238.

[00:10:55]The yearly dividend is projected at $1,86.

[00:11:00]That's $150 a month. Year 20, the portfolio is projected to sit at $17,463.

[00:11:09]Annual dividends would reach $10,47 or $867 a month. Close to the line, but not there yet. Year 22, the portfolio is projected to land at $147,323.

[00:11:26]The annual dividend projected at $15,471, which is $1,289 a month, almost to the goal of $1,300 a month. Now, here's what's worth noticing. Of the $137,323 added to John's portfolio over those 22 years, only $46,976 would come from capital appreciation.

[00:11:55]The other $90,347, the bigger share would come from reinvested dividends. So that's the flip. With the lowrisk portfolio, the share prices going up did most of the work. With the rent collectors, the dividends do most of the work. Same engine tilted toward income instead of growth. 22 years, 5 years faster than the previous portfolio. But look at the portfolio behind that check. $147,000 versus $299,000.

[00:12:32]Less than half the wealth for the same income. That's the trade John just made.

[00:12:39]Faster income, smaller portfolio. And there's still one path left to go. One that cuts the timeline again and asks Jon to take on even more risk. For the highest risk path, John walks into a category most beginners don't even know exists. Covered call ETFs. The yields are the biggest in this video. The timeline is the shortest. On paper, this looks like the obvious answer, except it isn't. An ETF is a fund, a bundle of stocks Jon can buy in a single click, the same way he'd buy a single stock. A covered call is a deal layered on top of that. The fund owns a pile of stocks and rents those stocks out to other investors. Investors who pay the fund cash upfront in the form of a premium for the rights to maybe buy those stocks later at a set price. The fund keeps that cash either way, then passes that cash on to John as a dividend. The trade-off, if the stocks go up too much, the fund has to sell them at the agreed price. So John basically caps his upside. He gets way more income now, but the portfolio underneath grows far more slowly. Higher income today, less price growth tomorrow. That's the deal. Let's check out the three covered call ETFs John has selected for this portfolio.

[00:14:08]His first pick, JPQ, the JP Morgan NASDAQ Equity Premium Income ETF. JPQ runs the covered call strategy on NASDAQ tech stocks, Apple, Microsoft, Nvidia, that group. The yield is enormous at 10.27%.

[00:14:27]Dividend growth is slow at 2.93% per year. Share price appreciation comes in at 6.31%, the highest of the three. Next, John adds JPI, the JP Morgan Equity Premium Income ETF. Same playbook as JPQ, broader field, large US stocks across the S&P 500 instead of just the NASDAQ.

[00:14:53]JPI pays an 8.44% yield with dividend growth of just 0.86% per year and share price appreciation of 1.93%.

[00:15:05]Less aggressive than JPQ on both ends.

[00:15:08]John rounds it out with PBP, the Invesco S&P 500 buyer right ETF. PBP is the most aggressive on premium collection, pulling in more cash upfront, leaving less price growth on the table. The yield is the highest of the three at 11.27%.

[00:15:28]Dividend growth is the fastest at 22.34%.

[00:15:33]But share price appreciation is the lowest at just 1.09%. 9%. Take the average across all three funds and the covered call portfolio works out to a 9.99% dividend yield, an 8.71% dividend growth rate, and just 3.11% in annual share price appreciation. And take note, almost the entire return here shows up as cash, not as price growth.

[00:16:01]Here's what $10,000 in this portfolio is projected to grow into. After year one, the portfolio was projected at $11,310 dividends that year, $999 or $83 a month, triple what the low-risk portfolio paid in year 1. By year five, the portfolio is projected at $19,495.

[00:16:26]Annual dividends hit $2,97 or $175 a month. By year 10, the portfolio reaches $44,189.

[00:16:37]Annual dividends climb to $6,38 or $53 a month, half the target in less than half the time. And by year 14, the portfolio is projected to reach $97,380, generating annual dividend income of $16,13 or $1,334 a month. That's the line crossed.

[00:17:04]Mission accomplished in 14 years. Of the $87,380 added to John's portfolio over those 14 years, only $13,789 actually came from capital appreciation.

[00:17:19]The other $73,591 came from reinvested dividends. The share prices barely moved. Almost the entire portfolio was built by buying more shares with dividends over and over. That is the covered call trade in one number. John got paid more faster, but the portfolio underneath stayed small. Now look at this side by side. If you look at the lowrisk portfolio, safe and reliable, that one takes 27 years to reach $1,300 a month. The medium risk path through REITs gets there in 22 and the high-risk path through covered call ETFs crosses the line in just 14 years.

[00:18:05]So depending on how much risk John can stomach, he can reach the same goal of $1,300 a month in 27 years, 22 years, or 14 years. But here's the catch. The wealth behind those checks isn't even close. safe and reliable at year 27 projected at $299,580.

[00:18:27]REITs at year 22 projected at $147,323.

[00:18:33]Covered call ETFs at year 14 projected at $97,380.

[00:18:40]Same monthly check at the end. Three times the wealth between the slowest path and the fastest path. So, which path was John actually building toward?

[00:18:51]Low risk, medium risk, or high risk?

[00:18:54]Well, that's the wrong question to land on. The real question is the one John answered at the very start. How soon does he need the money? Answer that and the path picks itself.

[00:19:09]What if you want to retire a millionaire and do it in just 10 years starting from zero? I ran the math on three timelines, including a quick decadel long target.