Retiree Living Off $107,000 in Dividend Income Shares 8 High-Yield Stock Picks, Says 'Anybody Can Do It'
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Investors are preparing for uncertainties amid potential tariffs and new trade policies in the coming days. Dividend stocks offer investors a sense of stability in challenging times. A Raymond James report highlighted that dividend stocks cushioned investors during difficult economic times like the 1930s, 1970s and 2000s.
Last year, an investor posted his concerns about dividend investing and asked whether it was possible to live entirely off dividend income in a question on r/Dividends, a Reddit community with over 650,000 followers. The post received over 130 comments and many investors shared their detailed input and success stories.
An investor said he's been living off his dividend income of $107,000 per year for about six years. He said this income was "livable" since his wife had a separate income and they had their own home and no debt. The investor also shared details about the total worth of his portfolio.
"Approximately $1.5M capital, about $1.35M of that in dividend-producing investments. (The rest is growth)," he added.
The retired investor said he followed the "playbook" of focusing on growth stocks and then switching to dividend securities. He believes "anybody can do it."
"I really just followed the playbook. For decades I just had a handful of growth funds. S&P500 (obviously), a Total World Stock fund (like VT), usually some sort of MidCap Growth fund and one or two others like Fidelity Contra Fund. A few others over the years, but always growth oriented. Shortly before I retired I sold about 80% of the growth funds and bought dividend-producing investments. Generally no individual stocks, but I do make exceptions," he said.
The investor had about 45 stocks and funds in his portfolio. Here are some of the high-yield names he held.
The PIMCO Corporate & Income Opportunity Fund (PTY) mainly invests in fixed-income securities to generate income and targets capital appreciation. Its monthly distribution rate is over 9%.
Omega Healthcare Investors
Omega Healthcare Investors (OHI) is a real estate investment trust focused on the health care industry. The stock has a dividend yield of about 7.2%. In October, Omega Healthcare raised its full-year earnings guidance to $2.84 – $2.86 from $2.78-$2.84. Over the past year, OHI shares have risen 24%.
Medical Properties Trust
Medical Properties Trust Inc. (MPW) is a healthcare-focused REIT that acquires and develops net-leased hospital facilities. It's among the top high-yield REITs in the investor’s portfolio and collects $107,000 in yearly dividends. MPW has a yield of over 7.8%.
The Abrdn Global Premier Properties Fund
The Abrdn Global Premier Properties Fund (AWP) is a closed-end fund that seeks income generation and capital gains by investing in real estate securities. It has a distribution rate of over 11%.
Arbor Realty Trust Inc. (ABR) is a mortgage REIT with a dividend yield of over 12.5%. The stock jumped in November after the company's third-quarter earnings beat Wall Street estimates.
The PIMCO Corporate & Income Strategy Fund
The PIMCO Corporate & Income Strategy Fund (PCN) is a closed-end fund that invests in corporate bonds, mortgage-related securities and other income-generating assets. Its distribution rate is over 9%.
Nuveen Multi-Asset Income Fund
The Nuveen Multi-Asset Income Fund (NMAI) is a closed-end fund that targets income generation and capital gains by investing in equities and debt securities. It has a monthly distribution rate of 13.7%.
BlackRock Multi-Sector Income Trust
BlackRock Multi-Sector Income Trust (BIT) yields about 10% and invests in loan and debt instruments. The fund's goal is to generate income and capital appreciation. Some of its top holdings include the FEDERAL NATIONAL MORTGAGE ASSOCIATION, UNIFORM MBS, TRANSDIGM INC., CLOUD SOFTWARE GROUP INC. and HUB INTERNATIONAL LTD.
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