Longtime readers of this blog are familiar with my plan to build an army of little money soldiers. Each soldier is a dividend-producing unit in my investment portfolio. Every month, I direct money to my brokerage account and buy as many units as I can afford in my preferred exchange traded fund.
I’m not proficient at reading income statements or at assessing whether it’s a good time to buy a stock. There are people who are exceptionally good at doing this, like the magnificent fellow who runs the Tawcan website. I’ve chosen a different path to building cash flow from dividends – I simply buy units in two dividend-paying exchange traded funds every single month.
I’ve been doing so for the past 8 years. And I’m seeing the rewards of my diligence. My dividend cash flow covers 50% of my monthly expenses! This is fantastic news! This means I can cut back my hours at work, or move to a lower-paid position, and my lifestyle will stay the same. My dividends are supplementing my day job, but they could also be re-deployed, if necessary, to replace my income!
When I first started building my army of little green soldiers, I’d been hoping that the dividend funds would kick off a few hundred dollars a month by the time I retired. That had been my only goal. However, as I started reading blogs and learning about ETFs, I realized that my dividend cash flow could become a viable alternative to working.
I expect that by the time I’m ready to hang up my hat, the cash flow from my dividends will be several thousand dollars per month. Woohoo! Consistent monthly cash flow is the lifeblood of retirement. And whatever’s not needed can be reinvested to even even more little money soldiers. I don’t spend on things I don’t need or want right now. I’m hardly likely to change this aspect of my personality after I retire.
If you’re interested in building your own cash-producing dividend army, consistent investing in dividend ETFs is one path to take. There are many others! If you’re more inclined to learning the technical aspect of buying individual stocks, then I would strongly encourage you to visit the Tawcan website and learn how Mr. Lai built his portfolio. You’ll then be in a better position to decide which option is more appealing to you.