Everyone has a different idea that resonates with them when it comes to planning our rat race exits. For me, I’m focusing on dumping money into dividend stocks (Kings and Aristocrats with a track record of paying/increasing payouts) for the next five-ten years as well as finding ways to set up passive income streams by front loading the work now and then collecting later without having to actively work to maintain them as much. I don’t mind hard work and plan to also experiment with ways to decrease my spending/increase income so that overall I can contribute the most money I reasonably can and get there within the next ten years (perhaps sooner?!)
I also don’t plan to ever fully stop working until close to the traditional retirement age. The goal for me is to flip my schedule and spend most days living and some days working vs. the traditional most days working and some days living.
My plan is to build my own ETF of dividend stocks, made up of Dividend Kings and Aristocrats. My primary focus for now is on Altria (MO) for the time being until I get to $500 dividend income per month ($1500 per quarter, approximately 1600 shares, since the dividend payout is almost $1 per share/quarter). **Edit March 2023- I have also started collecting monthly dividend stocks to balance out the cash flow and diversify the fund a bit more than putting all of my eggs into Altria’s basket**
**Update: April 30, 2023 – I realized I earn credit card rewards and interest in my high yield savings account each month in addition to dividends. I have decided to count a low average of $30/month in credit card rewards in addition to dividends as passive income towards my bills.
I use Robinhood (affiliate link – if you sign up with this link, we both get a free stock!) to buy these individual stocks since it is simple to do from my phone. My other IRAs are through Betterment (personal) and Fidelity (my employer-sponsored plan). I consider these other brokerage accounts to be my long-term 65+ retirement plan and the dividend stocks/passive income strategies to be the means for entering a phase where I can work as much/if I want.
I will include updates each month that include what I was able to contribute, progress, and how I did it.
**This is not financial advice, simply a summary of my own strategies to pursue a work optional life**
Update 10/27/22: 148.47 shares of MO @ $0.94 per share = $139.56 per quarter, $46.52 per month
~ 9.3% to $500 goal
Update 1/31/2023: 321.71 shares of MO @ $0.94 per share = $302.41 per quarter, $100.80 per month
~20.1% to $500 goal
Update 2/28/2023:
- 353.25 shares of MO @ $0.94 per share = $332.06 per quarter, $110.69 per month
- 9.82 shares of WBA @ $0.47 per share= $4.62 per quarter, $1.54 per month
Total per month: $112.23 per month ~ 22.4% to $500 goal
Update 3/31/2023:
- 360.05 shares of MO @ $0.94 per share/quarter = $338.45 per quarter, $112.82 per month
- 9.82 shares of WBA @ $0.47 per share/quarter= $4.62 per quarter, $1.54 per month
- 32.11 shares of O @ $0.25 per share/mo= $24.08 per quarter, $8.03 per month (this is a monthly dividend stock)
Total per month: $122.39 per month ~ 24.5% to $500 goal
Update 4/30/23
- 360.06 shares of MO @ $0.94 per share/quarter = $338.45 per quarter, $112.82 per month
- 9.82 shares of WBA @ $0.47 per share/quarter= $4.62 per quarter, $1.54 per month
- 48.38 shares of O @ $0.25 per share/mo= $36.29 per quarter, $12.09 per month (this is a monthly dividend stock)
Total dividends per month: $126.45 per month, credit card cash back per month: $30 per month
Total passive income per month: $156.45 ~ 31.3% to $500 goal
Update 8/27/23:
- 369.49 shares of MO @ $0.98 per share/quarter = $362.11 per quarter, $120.70 per month
- 149.17 shares of WBA @ $0.477 per share/quarter= $70.11 per quarter, $23.37 per month
- 59.86 shares of O @ $0.253 per share/mo= $44.89 per quarter, $14.97 per month (this is a monthly dividend stock)
- 10.46 shares of KO @ $0.46 per share/quarter= $4.81 per quarter, $1.60 per month
- 7.45 shares of BKH @ $0.625 per share/quarter= $4.62 per quarter, $1.54 per month
Total dividends per month: $162.18 per month, credit card cash back per month: $30 per month
Total passive income per month: $192.74 ~ 38.5% to initial $500 goal
From May-August, I took my foot off the gas a bit and started stockpiling some ‘just in case’ cash because I was actively planning to leave my job and wanted to be prepared for all options. I ended up securing another full time position earlier this month that will allow me to continue throwing a fair amount into dividend stocks each month. My new focus is to increase each month’s payout since the months that Altria pays out are much heavier-handed. Realty Income (O)’s monthly dividend helps with that, but I have created a target list of other Dividend Kings that pay out in the other months that Altria does not.
List of bills currently covered by dividends:
- Cell phones: $30/month (Mint Mobile – 2 paid off phones, 5 gb each– paid annually for best price)
- Internet: $75*/month (AT&T 100) — (increased $5 per month in August 2023)
- Monthly gas allowance for Prius L Eco model: $45/$45 (this has a built in buffer as I currently am getting gas every 7-10 weeks or so)
- Monthly transfer for quarterly household items (paper towels, TP, plastic bags, hand soap, etc.): $42/45