Am I a bad investor? No way! I consider myself a good dividend growth investor. That said, I got some comments (and even a video response) to a recent investing video that I just have to address. Today, I want to revisit the topic of driving $50/month in passive income via dividend growth stocks.
Today's video covers four ways to drive $50/month in passive income via dividend stocks. I cover Procter & Gamble (PG), Southern Company (SO), Cedar Fair (FUN), and 3M (MMM).
With Procter & Gamble (PG), one can drive $50/month in dividend income by investing $16,574.59. I consider PG a middle of the road company - not too low of a yield, and not too high either. A very stable company, it's a blue chip and carries a lower amount of risk. Of course one can drive $50/month with less capital invested, but that's absolutely not the point. I chose this example very intentionally, as a conservative and realistic investor. I did not just pick this stock out of a hat, I intentionally covered this stock as a good proxy for dividend investing overall.
Next, I transition into Southern Company (SO). $50/month in passive income only costs one an initial investment of $12,305 with Southern. That said, this stock exhibits lower dividend growth (being a utility). More income now may be at the expense of dividend growth. I did not choose this stock as my example previously because it's a really high yielder, and not the best fit as a blue chip, middle of the road company.
I also discuss Cedar Fair (FUN), a risker dividend stock pick that I'm looking at right now. This one only requires $8,630.90 invested for $50/month. However, it's the riskiest of all and may not be the right fit for newer investors. It's certainly not the example I would like to use on my channel as a general, all purpose investment like Procter & Gamble. That said, I really like this company right now, for my personal journey (and more established portfolio that can shoulder a small cap like this one).
Last, I share 3M (MMM) and how $22,823.16 invested in 2018 produces $50/month in passive income. In hindsight, I almost wish I picked this one as my original example, since it's even more conservative from an initial cash flow perspective. I'm all about conservative modeling here.
There are two buckets of investors discussed today, those that want to retire tomorrow and those that have some time until retirement. All the examples above apply to one retiring tomorrow. Today's video also covers some future dividend growth scenarios for all four stocks, and how yield on cost is a really helpful metric for those with a long-term approach. It's in future dividend growth with 3M really shines. What may look like a mistake, a low yielder today, looks incredibly exciting when one models 5, 10, 20, or even 30 years out!
Here's the video that started the discussion! Here's how to generate $50/month in passive income with dividend stocks:
Want to learn more about Southern Company, one of my favorite utilities? Here you go:
Want to learn about Cedar Fair, a stock I'm looking at really closely these days? Here's my new investing video:
Here's how I look at core, medium, and small stocks:
Sometimes, I like to buy stocks that are deep discounts:
I initiated a position in 3M in 2018:
Disclosure: I am long Procter & Gamble (PG), Southern Corporation (SO), and 3M (MMM). I own these stocks in my stock portfolio. Also, I am likely to buy Cedar Fair (FUN) within the next two weeks.
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