Passive Income: How To Make $100 Per Day With Dividends

What's up, guys? I'm Graham, so instead of the usual Doom and Gloom, let's talk about how to

make

a hundred dollars a day in

dividends

from zero dollars, the easy way, coming from someone who has done exactly that. In fact, my dividend portfolio currently generates only over ninety thousand dollars a year and the strategies to get there were pretty simple after all, with the stock market down more than 20 percent, the economy in ruins, and the Runaway Inflation Dividends can help offset the loss in stock value, they increase the value of the stock. More the market goes down and anyone could start making extra money immediately with just a dollar, so let's look at exactly what could be done with

dividends

. , the good, the bad and the ugly, what strategy has the potential to

make

the most money and then finally, the step by step plan you could use to go from zero to a hundred dollars a day, all for the cost of the subscribe if you haven't already, and as a thank you for doing so, here's a photo of a kitten.

So thank you very much everyone and also thank you very much to Wealthfront for sponsoring this video, but we'll talk about that later. In terms of where to start the art, we need to talk about the basics of dividends. Every time you buy a stock it entitles you to a portion of that company's profits and from time to time those profits are distributed to you on a regular basis in the form of a dividend, so if a stock pays five dollars a year and it's currently trading at a hundred dollars, that means you'll earn a five percent yield and because of that, the dividend yield could go up or down depending on the price the stock is sold at, of course, not all stocks They pay a dividend, but when they do, they generally range from less than one percent and sometimes more than ten percent depending on the company, although you will tend to find the strongest stocks that pay out between one and five percent each year, which will probably be the easiest

passive

income

you will ever earn, for example with In a company like Chevron, you will earn 3.6 percent just by holding the stock, which means that for every thousand dollars you invest, you will earn $36 free deposited into your account regularly, on top of the stock price. go up in price, hopefully the benefit from an investment point of view is that you will be able to receive predictable cash flow on a regular basis without having to sell shares and this will give you money left over that you could then use to reinvest in buying even more investments or I guess you could go and buy a jet ski if that's your thing, regardless of what floats are about;

However, when it comes to doing this like anything else, there are some pros and cons that need to be considered, so if you eventually want to scale up this is up to a hundred dollars a day. This is what you're up against, but first let's start with good old number one. You are isolated from the stock market for the most part. You will receive exactly the same dividend payment for the same amount. regardless of whether the stock is trading for twenty or forty dollars, and for someone expecting steady cash flow, this helps smooth out fluctuations in the market.

Second dividend payments are much less volatile than stock prices; For example, the SimpliSafe dividend block found that from 1900 to 2018 dividend payments remained fairly constant with an average change of plus or minus 10 during market declines. When you compare it to the S P 500 you will quickly see that there is a lot more volatility and for someone who wants constant cash flow it is a lot less stomach third during recessions the dividend payments sometimes even increase and they just say dividends points in three of the aforementioned recessions dividends paid to investors actually increased including a jump of 46 during the first recession after World War II, you know, although such an increase does not happen every time the average dividend cut is only half a percentage point Compared to the average stock market decline of 32 percent, fourth-dividend stocks have been shown to perform comparable to the overall market—in fact, Fidelity found that dividends accounted for 54 percent of the market. returns at times when inflation was above five percent, meaning that while they may not be the stocks that rise the most during a bull market, they also don't fall the most during a crisis and, fifth, depending on their category tax, dividends may actually be taxed at a lower rate.

I'll cover this in more detail towards the end of the video, but if you receive a qualified dividend you wouldn't be able to pay any taxes if you're single and making less than forty-one thousand dollars a year or you're married. less than eighty-three thousand dollars a year; However, while that all sounds great, we can't have a balanced discussion about dividends without also first talking about the downsides. Dividends are not guaranteed even though companies generally try to avoid cutting or reducing them. This happens and because dividends are a reflection of a company's profits, in the event of a recession, they may choose to turn off the money until conditions improve.

Second dividend payments mean nothing when the company itself loses value, in this case earning a five percent yield. You could actually lose money when the stock drops 30 in value and there are many examples of exactly this. Now sure there's a chance that the price will recover while you sit back and collect all that cash flow, but there's also a chance that it won't and that needs to be considered thirdly, although there may be some tax advantages, too. There could be some tax disadvantages, as opposed to buying a stock and only paying taxes when it is sold.

Dividends are taxed when you receive them and depending on your tax bracket, that could be as high as 20 percent or more and fourth dividends may simply be irrelevant. Well-known economists argued that dividend payments don't matter at all because they have no effect on the company or its cost of capital. In this case, they explained that If an investor really needs the money, all they have to do is sell the shares and the dividends don't actually create more value for the company itself, it's like saying that instead of paying a dividend of two percent, the stock price will simply go up. at an additional two percent where both scenarios leave you with exactly the same amount of value, although I generally admit that someone invests in both growth stocks and receives dividends from a variety of holdings.

I think there are some major advantages for anyone who wants to do this to generate

passive

income

and in terms of the step by step plan that you could use to go from zero to a hundred dollars a day, here's what you need to know, although before we get into that , while on the topic of money and investing, I must say that even though most assets are falling in price for the first time in years, savers are finally being rewarded and the sponsor of this part of the video About Wealth is there to make it much better for those who don't know, Wealth Front is the app to make the most of your savings in any market condition and now that just increased through the apy in your cash account at 2 .55 percent, which is one of the highest in the game, just for comparison, the national average is 0.17 percent. and without exaggeration, I have been using the wealth front account for years, even before any paid sponsorship.

In fact, you can watch my video from 2019 where they became my favorite cash account and I was talking about them simply because I enjoyed their product so much. Of course, if you're curious how they could offer so much interest, the simple answer is that the Federal Reserve's interest rates have been rising, which means banks are making more money on your deposits, so instead of staying With the whole wealth front, you transfer it at a higher price. percentage of each rate increase to you in the hopes that you will also explore some of their other products and the financial backed FDIC insured up to one million dollars through their partner banks, plus it is extremely easy to move your money as needed without account charges. overdraft fees and instant transfers to a wealth investment account during market hours from the start.

I've been a big advocate of keeping at least three to six months of your expenses in cash at all times, just in case something happens. and Wealthfront offers you a place to safely see how to let that money grow at a faster rate along with various other financial tools that help you save, invest in building long-term wealth, so if you are interested, the link is below in description or you can do it. Visit richfront.com GP Stefan to get started today and with that being said, let's get back to the video. In terms of building a dividend portfolio, contrary to what most people think, there are some companies that have never missed a dividend. payout ever and before we get into the step by step plan of how you could generate passive income, we first need to talk about Dividend Aristocrats, this is a select group of 65 S P 500 companies that have consistently increased their dividend payments.

For more than 25 years they adhered to strict criteria of growth size and the ability to continue increasing their payouts and over the last 30 years they have found that they have outperformed the S P 500 by almost one percent annually, in fact for the last two decades. There have only been two years of negative growth, one in 2008 and another in 2018. Beyond that dividend, the aristocrats have continued to grow above the average, in addition to the fact that a good part of these companies tend to outperform the market for a period of recession. and while they certainly could go down in price along with everything else, they tend to go down a lot less, not to mention psychologically.

I have to say that there is an element to receiving dividends that makes it much easier as a long-term investment strategy because by receiving scheduled payments, you are much less likely to worry about day-to-day fluctuations or Excel when you see that everything goes down in price, but when it comes to my own strategy and how you could use this to eventually make a hundred dollars a day. Here are my own thoughts to get you started over the past 15 years. I've tried pretty much every strategy possible when it comes to passive income and the first one was real estate.

When I was 21, I bought my first rental property and although I was able to make about a thousand dollars a month, it was a lot of work, no joke. I probably spent about a year looking at properties and making offers, another month fixing it up, and then another month renting it just to have it all. It disappeared when that tenant stopped paying. Since then, I have continued to purchase rental properties throughout Southern California and have generally had a really positive experience with my current cash flow of approximately twenty-two thousand dollars a month, but not only that.

It takes a lot of work, but I manage some of them myself and some random things still come up that need to be taken into account, so this is more like a part-time job than an investment besides that. For a long time I thought that YouTube would generate some passive income if I ever decided to stop posting, but I quickly realized that if you want YouTube to continue promoting your content, you have to constantly upload it, so now it's a full-time job, all the rest, from affiliate. Online marketing programs, storage facilities, and absentee ownership businesses carry a lot of long-term risk with a low probability of income continuing on the same trajectory, but my dividend investments have been the most passive income I've been able to earn. . and in terms of where and how I invest, it's pretty simple: The vast majority of my money is currently split between an S P 500 index fund that currently pays 1.65 percent and an international index fund that pays 3.76 percent .

I have a few dozen too. individual stocks that pay between half a percent and five percent, from Apple to Exxon to Simon Property Group, and I take the boring approach of simply dollar-cost averaging on a regular basis, no matter what price they trade at, the target was that the dividend should never be the main focus of the portfolio, but it should provide a steady source of income that I can continually reinvest or redistribute as needed and that should give my portfolio a little more stability thanks to Jerome Powell. The way I look at it is that the dividends could be the icing on the cake rather than the cake itself and over time I have been able to increase it to a ninety thousand dollar a year income that is completely passive and hands-off, in terms how you could build your own icing on the cake, passive income portfolio thatgenerate up to one hundred dollars a day starting from scratch.

Here's my own advice. If you look at this from the perspective I want to make a hundred dollars a day as quickly as possible, the easiest answer is. It's really just a simple math equation, if your average dividend payout is three percent, then you'll need $1.2 million invested to reach $100 a day. Something like this is not impossible and by investing an average of 17 per day you should be able to reach that amount in 35 years, assuming an eight percent return on your money, increase that amount to thirty dollars per day and you could get there in 28 years and If you can invest fifty dollars a day, you'll get there in 22 years, not to mention that if you're investing in a company that pays more than three percent, you could achieve the exact same goal for much less, for example, both Walgreens and VF Corporation are dividend aristocrats who pay a six percent dividend and if a hundred dollars a day is your only goal, you could achieve it by investing six hundred thousand dollars, which could be achieved by investing thirty dollars a day for twenty years, of course, the disadvantage is that in the Short term both stocks have had a pretty terrible year, but the dividend still holds if that's your main focus now.

I know that's probably not what you wanted to hear and we were hoping for something much more revolutionary that could make this happen in a much quicker period of time, but fortunately many of these companies end up increasing their dividend payments over time, so performance could increase at a much faster rate than expected, although the reality Doing this will take a lot of time or a lot of money and that is what I think prevents many people from trying it, after all, it is not necessarily the job because a Once you open a brokerage and enable automatic investing, you're pretty much done in 20 minutes, but instead it's the impatience of looking down another 20 years and thinking to yourself that it's going to take too long.

I would prefer to just trade cryptocurrencies during the day, but I will say that it is like going to the gym once you start. I'm not going to want to stop like I've never met anyone who makes five dollars a day passively and isn't completely excited about the idea of ​​making money without having to lift a finger every time they see the momentum starting. build, you will become as obsessed as I am and do everything you can to continue growing it because it is fun, however, keep in mind that, as in the VF and Walgreens examples, even solid dividend aristocrats could still be risky if the stock Underlying stocks lose value and sometimes it might be better to just not take the dividend and go for debt growth stocks, although I personally think a well diversified portfolio should have a mix of both, for one the dividends should be softened .

Volatility gives you steady cash flow and allows you to have more money left over to reinvest, but the rest should help you grow your net worth even if your portfolio looks like a rollercoaster in the short term. With that said, thank you very much for Looking also many thanks again to Wealthfront for sponsoring this video. Feel free to add me on Instagram. Thank you very much for watching and until next time.