Stock Investing Strategies

Stock investments

rainbow

Dividend Investing As a Retirement Plan

One way of saving up for retirement is to simply investing into dividend stocks. In fact in many cases it can be even better than traditional retirement plans such as 401ks and IRAs.

For example, let’s say that you decided to invest $500 a month into a few dividend ETFs. Let us also say that these dividend yielding stocks have a dividend yield of 10% annually. Let us also assume that these investment appreciate at around 5% a year, which is very reasonable. If you were able to save up $500 a month into these plans after 40 years you would have $766,700. More importantly this would translate into $76,670 of passive cash flow every year.

All that from simply setting aside a few hundred dollars here and there. However it becomes an even better idea if you look at the cash flow that it produces. For instance after 8 years this retirement plan will be producing as much passive income as you were saving every month. In other word after you have passed the 8 year mark your savings account would start paying you more then you are investing into it.

How many savings plans can you say pay you? Investing in dividend stocks can mean hundreds or even thousands of dollars worth of income each and every month even while you are still working.

Also if you reinvest the dividends it the potential is enormous dividend stocks. This can lead to an income in the six or even sevendigit annually at retirement. It is a little secret that has made a lot of people wealthy over the years.

While this is not a get rich quick strategy it can work very well for retirement. Over the long term saving money into safe secure investments that pay a regular income can be extremely powerful. It can be a nice way to save up money and can even lead to early retirement and a decent lifestyle after retirement.

Tags: ,

Comments are closed.