Stock Markets Analysis & Opinion

An Easy $237,000 in Dividend Income Missed by Most Investors

 

Finally, food! The kids had their slices. I had a break from my conversation. And I was after coaching refereeing eight periods of second-grade basketball.

I grabbed the greasiest slice of Margherita pizza on the tray and folded it like a proper East Coast refugee. And paused.

“Coach Brett?”

“Yeah buddy,” I replied to one of my players, slice still in hand.

“Do you have 40 cents?”

“No, sorry, buddy.” I shrugged. And I was attempted to eat once again.

Then my daughter approached.

“Dad. Do you have 40 cents?”

cents. That was . One could be a coincidence. Twice felt like a hustle.

“Who taught your team how to panhandle like pros?!” I turned to Coach Sean, who was being approached by member of our second-grade basketball team. Asking for forty cents.

Apparently, inflation has spilled over into gumballs. Their multi-decade “ceiling” of 25 cents officially cracked. Our postseason basketball party turned into a hunt for loose change.

To be fair, I “held strong” only because I was broke. Minutes earlier, my daughter raided my wallet for dollar bills, which were promptly “invested” in the video arcade. Which was conveniently located next to the suddenly half-empty gumball machine.

The kids had a field day. It took me back, as I ranted to my co-coach, to my time working in downtown San Francisco. The best panhandlers knew how to be specific and modest in their requests. .

Alright, let’s flip this around and pretend we are asking for living expenses. And instead of raiding Coach Brett’s wallet, we are tapping .

You know, the account that we contributed to for . Pullbacks aside, we mostly watched it grow. And grow. And grow.

Now it’s time to retire. Which means we’re no longer contributing to the account.

Most investors want their monthly “ask” of their own accounts to be small. This isn’t a rainy-day fund, it’s a retirement fund. Twelve months of living expenses aren’t enough. Twelve is more like it, with even being even better.

We hope retirees are not planning to live on loose change. Let’s say we need $6,000 per month. We’re going to have to scrape this we spent our lives accumulating.

So how high does that stack of greenbacks need to be? Well, 553 vanilla investors recently surveyed by said $3 million to $5 million.

Between $3 million and $5 million for a comfortable retirement! These “poor” guys and gals.

They obviously have but no. If they had regular income, they wouldn’t need to shoot such high savings goals that, let’s face it, are unrealistic to most folks.

We dividend investors are different. We take our savings and buy that generate . Which means we can turn a modest pile of money into steady cash streams.

“Toll bridges” like Alerian MLP ETF (NYSE:AMLP) are my favorite. AMLP owns 15 infrastructure companies—energy that charge for access to their pipelines.

As long as energy prices merely grind sideways, these toll bridges keep collecting. Which means these dividends continue to get paid.

The world in 2023 has supply constraints in the energy market. It’s a geopolitical mess out there. So, skip the producers. Give me the for a steady, secure retirement.

When we last discussed AMLP, we highlighted its recent dividend increase to $0.75 per share. But it’s tough to keep up with AMLP’s payout! The fund recently raised its dividend to $0.77 per share!

That $0.77 annualizes to a tip-top 7.9% yield. Or $237,000 in dividend income on the $3 million retirement minimum quoted in the survey.

3M-AMLP-Portfolio

What if we “only” have a million dollars? No problem. That’s still $79,000 in annual dividend income. Which covers the $6,000 in monthly expenses we discussed earlier (with room to spare!), not to mention (but I must) Social Security.

Of course, we want to diversify. We’ll give AMLP more “big yield” companies as we construct our retire on dividends portfolio.

See? We don’t need millions (with an “s”) of dollars to retire well. Attainable financial goals are fine, provided we know how to turn into reliable .

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