Dividend Investor Earning Over $10,000 a Month Shares Top 6 Stock Picks - 'Money Coming Without Working is Liberating'
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Dividend stocks are in focus as investors looking for stability amid volatility in AI stocks and turn to recession-proof companies that reward their investors with regular income. However, choosing dividend stocks to meet long-term financial goals is not easy for beginner investors with a limited budget.
A few days ago, someone asked income investors on r/Dividends — a Reddit discussion board —how much they were earning per month from dividends. The question received more than 400 comments, with many success stories and impressive income reports.
An investor said he was making more than $10,000 a month on average with a portfolio worth about $1.4 million. He said most of this income is reinvested in dividend stocks as he does not spend it. The investor also explained why he's playing it safe:
"In case you want to know why: I work in high stress, high income, high risk tech. It’s very possible my job just disappear without much notice, and it could be a long time till I find another. This actually happened to me many years ago, before I had put the dividends put together (or the money to do it)."
The investor said he was once laid off and had to live off his savings for a few months. That phase of life taught him that he should develop a secondary income stream for tough times.
"I said I never wanted that nightmare again, and purposely worked towards this. having some money coming in without working for it is liberating."
Let's take a look at some of the key dividend stocks in his portfolio based on the details he publicly shared on Reddit.
NEOS Nasdaq-100 High Income ETF
NEOS Nasdaq-100 High Income ETF (NASDAQ:QQQI) was one of the top holdings of the investor making more than $10,000 a month in dividends. However, the investor said he considers the fund risky.
"I hold QQQI, probably a couple hundred thousand dollars worth (not a large pecent of my NW). I consider it the highest risk single holding that I have.... and you are 100% QQQI and SPYI. I guess ignorance is bliss, if you knew more about this, you probably wouldn’t hold it," he said in a separate discussion on Reddit.
NEOS Nasdaq-100 High Income ETF exposes investors to Nasdaq 100 companies and generates income by selling covered call options on the index.
SPDR Portfolio High Yield Bond ETF
The SPDR Portfolio High Yield Bond ETF (NYSE:SPHY) provides inventors exposure to USD-denominated high-yield debt. It tracks the ICE BofA US High Yield Index. It generates monthly income from the interest income it collects on its high-yield bond holdings.
The investor making over $10,000 a month in dividends said that US Treasury 3 Month Bill ETF (NASDAQ:TBIL) was a part of his portfolio. However, in the most recent comments on the social platform, he said he sold his entire position in the fund.
"I sold all my TBILs this morning ($300k worth) and bought QQQ with some of it. I was planning on converting TBILS to higher yielding PULS etf anyways, and buying PULS right after they pay out next week.. the QQQ dip was unexpected but welcomed. I’ve been wanting to buy more, but love doing it on deep red days," he said.
PGIM Ultra Short Bond ETF
The PGIM Ultra Short Bond ETF (NYSE:PULS) was a new addition in the portfolio of the investor. PULS is an ultra-short duration bond ETF that offers higher yields than cash while maintaining low interest rate risk.
The Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) was a key part of the portfolio. The investor said he buys QQQ whenever the market sees a broader selloff.
"I've been buying QQQ every time it dips and people say the world is ending. so far, the world hasn’t ended and it’s kept by cost basis down."
QQQ is one of the best ways to enjoy dividend income and capital gains through stock price appreciation, as the ETF exposes some of the top tech stocks in the NASDAQ-100 index.
MPLX
The investor earning over $10,000 a month said midstream energy infrastructure company MPLX LP (NYSE:MPLX) is a "stable" investment in the MLP space.
"MPLX, like most MLPs is pretty stable, well kept secrets in plain sight."
MPLX LP is one of the high-yield dividend stocks in the Redditor's portfolio. The company has a dividend yield of about 7.4% and is owned by Marathon Petroleum (NYSE:MCO).
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