Want $500 a Month in Dividends? Here's How Much You'd Need to Invest to Get There.
An extra $500 a month could help a lot of people. An extra $500 without having to do extra work could really help a lot of people. In the stock market, it can happen with a quality dividend ETF like the Schwab U.S. Dividend Equity ETF(NYSEMKT: SCHD).
SCHD routinely has one of the higher yields among dividend ETFs. The exact amount you need to invest to earn $500 in monthly dividends ($1,500 each of its quarterly payouts) will vary based on yields at the time, but here is how the math could play out based on various yields and a recent closing price of $36.21 on Nov. 4:
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| Dividend Yield |
Shares Needed |
Investment Needed |
|---|---|---|
| 2.9% (current) |
5,714 |
$208,897 |
| 3.2% (midpoint between current and 3-year average) |
5,178 |
$187,500 |
| 3.5% (3-year average) |
4,734 |
$171,429 |
Table by author based on recent $36.21 share price of SCHD.
Most investors won't be able to dump a lump sum into SCHD to hit the $500 monthly mark instantly, but it's doable by investing consistently over time.
One of SCHD's key strengths is its screening criteria for choosing companies to include in the fund. A company must have 10 consecutive years of dividend payments, five consecutive years of dividend increases, and be in a strong overall financial position. These guardrails help ensure the fund holds only quality, shareholder-friendly companies, so you don't have to overthink it. You can set it and forget it.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
Want $500 a Month in Dividends? Here's How Much You'd Need to Invest to Get There. was originally published by The Motley Fool
