The MAGIC NUMBER To Live Off Dividends In 2024

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A few days ago, I read an article in the Wall Street journal talking about the magic number that you need to retire. But truth be told, there is no real magic number that can tell you whether or not you’re eligible for retirement. From a dividend investing point of view, if your goal is to live off dividends, it’s less a matter of how much you have invested, and it’s more about how much passive dividend income you’re generating when you go to retire.
The ideas and opinions presented in this video are meant for informational and entertainment purposes only, are not intended to serve as a recommendation to buy or sell any security in any account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision.

[@MrB-bg7qe]

Invest in VOO for the next 1-3 decades which should get you a 8-10% yearly return. Once you get 500K-1M in VOO; sell some shares and buy higher yielding stocks and ETFs like O, MAIN, ARCC, JEPQ, SPYI, Etc.

[@cmscole]

that’s so smart! i’m 16 years old and im for sure doing this to get that compounding early and easily have millions when im older.

[@joy2come119]

I keep debating on if I wont to just focus on growth then sell off some later to receive passive income or focus on growth and dividends now so i can build up my shares and the possibility of increased share price..smh decisions decisions

[@passionzhere]

I have invested in voo 4 long term but for dividends I have schd & jpeq

[@BigcountryReactions]

Why do people rave over o. It only pays a .25$ per share

[@fikonfraktare]

​@@BigcountryReactionsyield is 5.6%, not too bad.

[@CTR_Ross]

I am 25 and i am very frugal. I would only need £1500 per month to cover mine and my fiancé's current spending. We both have no debt and a very small rent which is awesome. I should be able to hit this amount from dividends in my 40s so we should be able to retire at any point from then. Or at least that's the plan 😂 there will be hurdles along the way i'm sure

[@rynewilliams]

That’s awesome! I would imagine your expenses will increase at least some over the next 10-15 years

[@thepunish3r735]

@@rynewilliamsexpecially if u want to live life! . My vacation this year is your annual spending for two lol

[@SethroBodine913]

@@thepunish3r735you going to the moon?

[@mikhailpetrunin304]

Thanks for the great video Ryne! I’m 37 and just hit 904 shares of SCHD.

[@rynewilliams]

Wow, very impressive position! I need to get on your level

[@JJ-jn7ei]

Love your VOO example, this is doable!

[@rynewilliams]

Thank you!

[@olehtverdokhlib9062]

Cats think they're weightless ninjas, but couches always know the truth. 🐈‍⬛

[@rynewilliams]

😂😂

[@aman888]

I probably spend about $1500-$2000 monthly, on average. Currently dividends and interest about $45k/year or $3.7k/month. I think I'll feel comfortable at $4k/mo.

[@rynewilliams]

That's solid!

[@kevinmendoza4402]

Great video Ryne! Very informative! 🚀📈

[@rynewilliams]

Thank you my friend!

[@willielong7893]

Great vid.👊🏼

[@rynewilliams]

Thank you my friend! I’m glad you enjoyed this one

[@ciceromonteiro2052]

Excellent content that shows the importance of investing for the long term and in my portfolio there is the etf VOO.

[@rynewilliams]

Thank you my friend!

[@ciceromonteiro2052]

@@rynewilliams Not at all!Ryne.

[@ghant.]

The yield on cost will go up not only based of the dividend growth but the share price as well, if you buy a share of a company for $100 and the company share price goes down to $80 for example then your yield on cost will be terrible, WBA for example if you bought its share 10 years ago for $66 you are getting 1.5 yield on cost which equal to $1 while if you buy the shares today for $19 your yield on cost will be around 5.58 which is around $1 as well although they were growing their dividends, so in short its about dividend growth but the share price as well, in my experience if you buy the right stock/ ETF and lump sum at the right time your yield on cost will sky rocket

[@ericsmith9835]

I'm just starting my ETF portfolio, SCHD is definitely a power player.

[@jeffsusla6213]

SCHD is my foundation with lots single stocks sprinkles! Just drank up some more SBUX, sitting at 60 shares. Keep it up!

[@rynewilliams]

There you go! I'm right behind you with SBUX. I'm at 56 shares

[@TortoiseInvesting]

Under $500k hits my goal, average close to $2,000 a month which equals around 4% dividend yield. House is paid for, car will be paid off next year, doing a good job at keep overall monthly costs down and intent to continue working on things.

[@rynewilliams]

Man that’s legit. Your house is totally paid off?

[@TortoiseInvesting]

@@rynewilliams yep! sold over $40k from our Pokemon Card collection + what my wifes grandma assisted with. I have no house payment to worry about (:

[@rynewilliams]

Man good for you! I’m jealous. That’s huge

[@ev4593]

What if a person decides instead of investing in dividends & relying off the dividend income in retirement, they just withdraw 3-4% of the value of their portfolio every year in retirement without ever running out of money? (Kinda going off the 4% rule). Withdraw 3-4% off all your stocks, funds, or both. My plan is to invest in VOO and when ready to retire withdraw 3-4% every year, rather then relying off of VOO’s 1.5% dividend to live off of.

[@rynewilliams]

That works just fine as well!

[@tmgclips5300]

Just opened my Roth IRA today, can’t wait to max it out in the future

[@rynewilliams]

Great job! Which brokerage are you using for your Roth?

[@tmgclips5300]

@@rynewilliams decided with fidelity since they allow fractional purchases of ETFs

[@JungleEddie]

Wouldn't you be better off with spending your 30 years investing in VOO and at retirement selling it all and buying SCHD?

[@JJ-jn7ei]

I’m slowly coming to that same conclusion….

[@MrB-bg7qe]

Or sell some (not all) of those VOO shares and buy into higher yield stocks and ETFs like O, MAIN, ARCC, JEPQ, SPYI, etc. Those stocks and ETFs share prices are less effected by the overall market too. Your portfolio won't suffer as much in a down market.

[@rynewilliams]

I don’t know if you’d necessarily be better off. What would be the reasoning behind that?

[@JJ-jn7ei]

​@rynewilliams we would consider VOO for growth. SCHD would be more of a slower growth but more steady/less volatile. So We'd take advantage of the S&P (if history repeats itself) then reballance for the more stable income

[@rynewilliams]

In doing so, do you think you’d end up with more income than if you just started with SCHD from the get go?

[@GioMixMusic]

1.4M maybe what you need retire today to live off dividends, but in 30 years you will need a vastly larger sum, unless you can count on other incomes.

[@fikonfraktare]

You should have some dividends left to keep reinvesting and along with dividend growth your income should keep growing.

[@BrettBayer-gj3uo]

Overall, I like the video. However, inflation will rise and 60k in 30 years won't have the purchasing power that it has today.

[@rolandosouffrain7957]

Can you do a comparison between a growth e.t.f. and a dividend e.t.f. doing the same? Let's say a Roth IRA with a $7k each yr for 30yrs. I. A growth E.T.F. guy myself

[@pauobunyon9791]

Im also learning to NEVER sell anything that pays even with a lowering in divvies. I just start a new position in another ETF or stock every dollar adds up to a bigger number in time !

[@rynewilliams]

What prompted you to never want to sell anything?

[@JuanRamonRuizRipoll]

Thanks Ryne, I have a doubt about the issue of inflation, how it plays into these numbers, because it seems that in 32 years we already have 60,000 USD but it seems to me that 60,000 USD is not the same at today's price.

[@rynewilliams]

That’s true. Inflation will certainly have an impact

[@analyticsx3]

Well diversified portfolio of income funds and cash flow is the name of the game. I know it’s not your niche but Its quite easy today to have a bunch of 10-30% funds and bring in 10k or more a month that’s partial classified as roc for tax advantages. Hopefully this is still the case in 20 or more years

[@rynewilliams]

The longevity of that approach is the big question. I hope it ends up being great for you though! Some of those yields get pretty hard to ignore

[@analyticsx3]

@@rynewilliams it’s not my portfolio I’m way to far out from retirement. I don’t hesitate to talk with people who are retired. The biggest factor is investing every week for 20-30yrs. Our holdings are going to drastically change when we do need to live off our investments. Spy is great until we get a market crash and we got medical bills and the car needs work.

[@alexmac2010]

I’m in the UK and have to wait until I’m 65 to get my pension. I will use my portfolio to allow me to retire at 55 and live off that passive income for 10 years before getting my pension. I’m 39 and hit £110k recently so aiming for £250k by 55 🙏🏻

[@rynewilliams]

Great job! That’s a totally doable amount by 55 based on where you’re at today

[@JoeSoCal2303]

I think you'll be at 250k by 45. It grows fast once you have a lot invested.

[@alexmac2010]

@@JoeSoCal2303 you think compounding is that strong over next 6 years?!

[@ldh812]

Alex, in the UK and two years behind you and aiming for the same as you. Loading up my ISA each year, my work place pension and a bit into a SIPP.

[@JoeSoCal2303]

@alexmac2010 well I'm hoping you have the bug for investing too. It took me 5 years to get to 50k net worth. It took me another 2 years to get to 100k. I got to 150k in 10 months. Can't say for certain you'll get there in 6 years but I believe in you lol!!! (Side note: Currently at 167k net worth but hoping to get to 250k in 2-3 years, and ill need to contribute a lot to do so).

[@justinfernandez5525]

What are your thoughts on FDHY?

[@rynewilliams]

I’ve never looked into it!

[@kennethmoore427]

Ryne I’m just coming over from the crypto world to the stock world starting on my dividend portfolio. How do you find dividend stocks, REITs and ETFs that just launched? I saw something that if you invested just $1000 dollars in Reality Income when it came out, you would have some astronomical number now. I’d like to have a risky part of my portfolio for early dividend stocks but can’t find this data anywhere

[@rynewilliams]

I think you just have to keep your ear to the ground for IPOs or new dividend announcements. I'm not sure how else you'd go about doing that. Welcome to the world of dividend investing though!

[@FootballCardOlly]

I feel like if i hit $40k in dividends i would be happy. Then maybe work another year or 2 just to pad those numbers and feel a little more comfortable. But then of course $40k/year, 15 years from now may not be enough 🥺

[@rynewilliams]

Yea that’s the big question…how much will be enough 15-20 years from now. Still, $40k coming in passively would be a huge help

[@Dgenk31]

That 40 thousand provided you have dividend growth stocks will be a lot higher in fifteen years too. I like to have stocks at least 7 percent dividend growth to beat inflation

[@FootballCardOlly]

@@Dgenk31 the majority of my stocks are in companies that grow the dividend every year. Mostly dividend aristocrats and dividend kings. Plus voo and SCHD type stuff.

well it depends of the country Ryne here in europe/lisbon i only need 1000 dollars a month to retire so i imagine in us is way higher than that cheers

[@rynewilliams]

Cheers my friend!

[@kevincross1240]

How does social security fit in to the numbers?

[@rynewilliams]

It would be an extra source of income in addition to what your investments will offer

[@avatar123456789s]

So the calculation is Annual amount(montly Income x 12) / yield% = amount needed invested Is That the same for quarterly paying and montly paying stocks? Like is it the same for Altria and realty Income. Or should I do it x 4 instead of 12

[@rynewilliams]

The annual amount would be the monthly amount x12, or it would be the quarterly amount x 4

[@JJ-jn7ei]

Wait, so I would like to get about 3k in dividends a month. So that 3x12=the amount if $ I need to invest?

[@rynewilliams]

If you want $3k per month, you’d multiply that by 12 and divide that by the dividend yield to get the amount you’d need to invest

[@vasunseeker]

I’m almost 65. Does it make sense for me to invest in a Roth since I can only contribute until I’m 70.5? Thanks!

[@apezucolabooster]

Fastest way may not be the best way, but it sure is the fastest!

[@jollama]

That literally doesn’t make sense

[@rynewilliams]

The fastest way is certainly the fastest way

[@apezucolabooster]

​@@jollama Maybe watching the video linked at the end of this video will help you. May your portfolio be green this year!

[@jollama]

@@apezucolabooster I hold everything that video talked about, whether it’s directly buying shares or indirectly though ETFs such as JEPI and SCHD

[@digizinetobseen7167]

I hope to have 3000 to 5000 per month in dividends or business income

[@rynewilliams]

That's a great goal to work toward!

[@shanehess8950]

Just varies I guess what you have . Pensions or disability such as VA . Me personally I think 25k on dividends is good and realistic .

[@rynewilliams]

I’m with you. A couple grand coming in every month would be a huge help

[@jbigtruss5301]

What is yield on cost?

[@rynewilliams]

I defined it and explained it in the video. Did you see that part?

[@jbigtruss5301]

@@rynewilliams I watched the video but don't understand what that means.

[@jbigtruss5301]

Do we pay that for owning that etf?

[@Bob-ut]

Number got a bit further away after today 😢

[@rynewilliams]

Haha seriously

[@passionzhere]

Currently I'm making 54k in dividends on 1 million but my target is 100 k minimum

[@rynewilliams]

Wow!

[@keyshawnb6565]

The math is not mathing in my head. So you say after 33 years you will have 1.5mill with a yield on cost of 3.39% in VOO, but only getting 8,161 in annual income? Where is my math failing me lol. I would think 1.5mill x yield on cost, but I guess that is the wrong way to calculate it?

[@rynewilliams]

If you divide the annual dividend income at that time by the portfolio value, that will give you your portfolios current dividend yield. The yield on cost would be the dividend income divided by the portfolio’s cost basis (market value - unrealized gain)

[@aldrinhguiste23]

I’m aiming for 20k/month 😅

[@rynewilliams]

That would be awesome!

[@jeffaragon]

100k

[@rynewilliams]

Nice round number 👏

[@jeffaragon]

@@rynewilliams yea brotha 8k a month would do just fine lol and obviously from there build it up more and faster so if more is needed then it wouldn't be difficult to make more theoretically lol

[@rynewilliams]

True that!

[@hakalamusic]

3.7k a month and I’ll Uber eats a little when I’m short

[@rynewilliams]

Totally doable

[@InvestersEdge-lm6zl]

Unfortunately the sp500 doesn’t have dividend growth. Maybe using schd would be a better example

[@rynewilliams]

I did that right after VOO in the video

[@InvestersEdge-lm6zl]

@@rynewilliams yea i spoke too soon but i still think 6% dividend growth on sp500 is overshooting by a mile . At least when looking over its history. But i understand these are estimates . Good video anyway. Enjoy watching and you have an exciting personality. Even if i find a few faults ! 😂

[@rynewilliams]

@@InvestersEdge-lm6zl thank you! Maybe 4-5% would’ve been better to use for the dividend growth CAGR on it

[@InvestersEdge-lm6zl]

@@rynewilliamsafter reviewing the dividend history it does have alot of growth over the years. My apologies. I was looking at the low yield and assuming because the yield was declining over the years that the dividend growth was too but i am completely wrong. Sorry for wasting your time.

[@rynewilliams]

Not a waste of time at all! You have nothing to apologize for. Thank you so much for watching and commenting. Keep up the good work 👏

[@kylemccormack1785]

The honest answer to your question is that I do not expect to be able to comfortably retire in Canada, ever.

[@rynewilliams]

What makes you say that??

[@kylemccormack1785]

@@rynewilliams I'm currently managing to save approximately $200 a month. Let's assume 10% compounded growth. In 30 years, when I will be just 1 year from retirement, I will have $578,058.42. Which is, in a word, nothing.

[@martinweber202]

I have 82,000 in passive income and spent 15,000last yr

[@jollama]

Cool

[@rynewilliams]

That’s fantastic!

[@dwade3]

Impressive! How long did it take you to reach that milestone? I'm currently only making 3k passively a year 😔