Your personal finance things like that, it’s redressing any that kind of stuff and you’re not yet invested, definitely consider, invest or not yet invested.
I should say not yet subscribed. I guess you’d be invested in the blog too, but if you’re not yet subscribed, don’t forget, share subscribe, there’s movement, new thing, saying you’re like investing in my blog by subscribing to me but anyways. So this is actually a question I get asked somewhat often, but I feel like when people think about this question. They think of it more of a day trading aspect like how much money do I need, in my account to you, know, day trade like trade of five days a week or you know if you’re trading, Forex or something like that seven days a week.
But that’s not what I’m like talking about here. This is definitely going to be more focused on investing in dividend investing rather than actually trading, because I actually don’t think that’s a very profitable way to invest your money at all, and I really don’t think you’d be able to make a full-time living off of it. I mean I’m sure there are some people out there, but I would say: there’s a lot more people who make more money off of investing than they do day trading.
I really don’t think day. Trading is a viable way to invest your money and I know that’s why. How do you guys actually read my blog but nonetheless, so I’m sure there’ll be some haters in the comment section being like? Oh, I have a ten thousand dollar account and I make a thousand dollars every day day trading will ya. Go you know you keep doing that, but anyways getting back into it. So how much money you actually need to invest to make a full-time living.
So I would probably consider like a reasonable living like I think it’s like in the u.S. Like 20,000 or so a year is like the poverty level. So I assume people aren’t looking to make poverty money unless perhaps they’re doing this on top of their income. Then, of course, an extra 20 K a year it’d be awesome if you’re making a normal income. But you know I’m going to assume that most people who are reading us are probably going to make above that probably that bare minimum, like 30 K plus a year and of course, if you’re getting into bigger portfolio’s and better investing strategies, perhaps more than that.
But we’ll get into in a bit, so the first part of this I’ll be talking about is specifically dividend investing. So let’s look at dividend investing. So let’s say I don’t know you have a reasonably large portfolio. That’s exactly a hundred thousand dollars an amazing! This amount, because it’s nice and easy to like divide it if your portfolio is like half of that or a quarter of that or a tenth of that, whatever it might be.
So let’s say you got a 100k portfolio and let’s say you are a really big dividend: investor pretty much. All the stocks in your portfolio are dividend stocks and let’s say you have a good yield that averages around 3 % and 3 % is actually a good yield once again doing here in the nonsense. In the comment section saying you own, you know your average dividend yield on your portfolio is 10 % and hold on a second.
My cap is be going back here. These dump times interrupts the articles, but anyways stay over there. So let’s say you have 100k. You know you have a 3 % dividend yield on average in your portfolio, so in total every single year, if your portfolio is not really growing, it’s just staying the same. Let’s say you’d be making a total of $ 3,000, so obviously just purely from dividends, with $ 100,000 portfolio at a 3 % dividend yield on average in your portfolio that clearly be not not enough to make a full-time income off of that would be a nice Little chunk of money, if you I don’t know we’re using that to save up and go on vacation every year or something like that, but they would definitely not be enough to go full-time and, let’s say Alyssa’s doing that times.
5. Let’s see you have a 500k portfolio, average dividend yield is 3 % a year and then that once again would be 15k a year. So you know 15,000 bucks once again. That’s definitely a pretty decent amount of money, nothing wrong with that. You know you could definitely buy some nice things or reinvest that or put it into, or you know who knows what maybe your 401k or something you know. I don’t really know what you got to do with it, but regardless that probably still isn’t enough to go full-time for most people that live in the u.
S. Anyway, so you’d probably be still or you would be still below the poverty line in that time. But let’s just do it, you know times 2 again and let’s say you have a million dollar portfolio now, if you have a million dollar portfolio, you’re, probably not trying to invest looking for money to invest full time but either way we’re using it. In this example, let’s say you have a million dollar portfolio, a 3 percent dividend yield and, and that would end up getting you $ 30,000 a year for that income.
Now that would actually be like a full-time income like you could definitely live. You know pretty decently off $ 30,000 and again. Obviously these depends where you lived like. If you plan on living in LA or you know, New York, mmm $ 30,000 probably is going to cut it, but that’s just kind of obvious. You know it’s regardless of where you live. It does matter. Actually you know how much money you’re making but anyways so that you know dividend investing.
You would definitely have to have a pretty significant amount in your portfolio to be getting a livable income from it or you would have to have a really high yield, but it is definitely difficult to find stocks that you know to have an average yield near portfolio Over three or four percent, like four percent, is a very good yield, so is 3 percent like it would be tough unless you’re investing in some very risky stocks are probably going to cut their dividends if you’re investing in stocks to have like 1012.
You know above that percent dividend yield. That is when the risk starts coming on, and it’s very likely that these stocks aren’t going to continue to pay out those dividends. So then you’d be kind of wasting your money. At least that’s how I invest – or at least I do my dividend: investing but anyways, so that’s dividend investing and yes, I do know, I’m sure there’ll be some people in the comment section saying what about yield on cost.
What about that? Well, yes, you’ll! Don’t cost. As a real thing, especially if you’re planning on doing some long term dividend investing, basically what that is not to get to and death is when you buy a stock, you know you buy, let’s say stock it like a 1 % Devine yield and over time they Increase that dividend yield then of course, you’d be getting a better deal front of your money as long as the stock’s price goes up as well as the dividend yield goes up and you know one or another doesn’t necessarily have to go up a lot, but your Yield on cost would be a lot higher than when you bought it originally.
If that makes sense, but anyways moving on to the next part I’ll be talking about what how you could pass and make a full-time living just from a normal portfolio and just from simply getting capital returns back so let’s say I have a hundred thousand dollar portfolio Again and let’s just say you know, I’m doing the average with us and peas been doing over the past like 50 or 60 years, or so, which is 7 %, so that mean I’d, be getting return of $ 7,000 a year and when you’re doing it.
This way, unlike dividends, like dividends, are still taxed, but when it’s a you’re getting that money from actually just simply your portfolio and your stocks up you’d actually have to be selling some of these shares at some point in time to get that gain back. So this once again would be taxed. Unless you like perfectly hold it like over a year, then it would be taxed last put either way. If you’re trying to do this, an income you’d probably be selling more actively to an extent, unless you like hold it for like a set number of years, then just gradually sell over time, but either way you you’re going to get taxed.
If it’s just in your own personal portfolio, so that $ 7000 will also be taxed, and that depends on like your income and stuff like that, but anyways seven thousand dollars, let’s just say flat, without any taxes right now, but you’d have to be selling your stocks. In order to give this money back that money, she’s not going to appear in your portfolio unlike dividends and, let’s just say all right – let’s say you did what my portfolio did.
In 2017 I had a 40 percent returned in 2017, which is like ridiculously good, but I will say, the rest of the market performed pretty well on top of that. So that definitely helped me out a lot. But besides that I had a 40 percent return in 2017 and let’s say you know: I have that hundred K portfolio again times. Forty percent that’s $ 40,000 a year now that is definitely a livable income, but once again, that would involve you selling your stocks to get those gains that you’ve made and that money would always all be’text.
But I’m sure there’s plenty of you out there that make 40k a year, that’s getting taxed. So that’s by you know that is a very, very livable income, but is somewhat unrealistic to think that you’re going to get 40 % returns every single year I’ll say even for myself. I was surprised that I got that good of a return and then, let’s just say, do another example: what’s not such a high return but a low return in a bigger portfolio, let’s say you have a $ 500,000 portfolio and let’s say you’re doing this at 10 %, so this once again is 10 %.
Probably I would. I would argue that that’s relatively reasonable return over a year, it’s a little bit higher than that SMP. But you know, maybe you know what you’re doing with investing you’re investing in good companies. Maybe if we have to have a dividend yield coming in as well and, let’s just say you know 10 % – I don’t think that’s too crazy or out of the ballpark or anything like that, so 10 % times $ 500,000 and this portfolio is much better than The other examples would be fifty eight thousand dollars a year.
So once again, that is definitely a livable income, but they’ll be taxed against, would be a little bit less than that, and also you would have to be selling some sort of stocks in one way or another to get this money back. So once again you know they would hold a pretty bull, pretty reasonable amount in your portfolio, but $ 50,000 a year is definitely a decent chunk of money. There’s you know, there’s nothing as a very, very good income and then you could obviously continue to do the math all the way up, but just a couple of things before I close out the article you know the first part whenever dividend yields the second product went Over just simply like selling your stocks after a certain amount and getting a percent back and of course, you know the way I invest.
There’s plenty of people out there probably invest like this as well. You get different emails and your stocks go up. You know you might not just be totally a dividend investor or just totally like a growth stock investor, or something like that. So I do understand that people have different investing styles and strategies and another thing you know this article was just like just fabricated examples.
These aren’t like real results or anything like that. I’m besides, actually my when I made an example to myself, but either way these are just random. You know examples you, your results in the market may vary the way I invest. I don’t plan on ever taking out as income, at least for probably 40 years or so so I have no intentions of using my portfolio as an income. I have intentions of you know using it just to build up my portfolio and reinvest that back in, because I know down the road.
My portfolio can be significantly bigger. If I continue to reinvest my dividends as well as my returns and just never take money out and only put money in so you know, besides that, I don’t think you know most people out there if you’re investing with that high of money in your portfolio, like Those examples had where you’d be able to make a livable income. It’s likely that you’re making a decent chunk of change from your job or whatever else you do, and you probably don’t need that to make an income.
So I feel like this is like a myth: that kind of like day traders out there and some youtubers out there try to sell their courses on, is that you can get like these ridiculous returns and make a full time income off of stocks. Now, of course, if you’re making 10 % a day yeah, you could totally make a full time income off of investing in the stock market, but it’s probably more like 10 % a year, rather than 10 % of the day, but other than that guys.
It’s really it for this article. If you enjoyed the article. Definitely even like any of you hate this article and thought that it sucked you day, traders out there, I’m sure you’ll be dropping some dislikes on this article feel free to leave it dislike as well, but other than that guys, like I said before, if you’re new To the blog, I talked about the stock market, personal finance, entrepreneurship, investing things like that, its riches, that kind of stuff definitely consider subscribing but other than that guys.
Thanks for reading
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