Dividend Strategy for Monthly Income

This is a dividend stock strategy that people in retirement do.  They put large amounts of money into dividend paying stocks and live off of the monthly or quarterly dividend.

ARR (Armour REIT-Real Estate investment Trust) – pays a dividend of 10 cents a share each month and the stock value is around $7.  What also makes this stock attractive is that over about 3 years the stock’s price hasn’t changed much, making it a pretty consistent income source.

Buy 100 shares for $700 and earn $10 a month

If you buy 18,571 shares for a total of $130,000 you will make $1,857 a month.

Compare that to buying a rental property for $130,000 and renting it for $1,500 a month (you also don’t have to pay a property manager or worry about unruly tenants)

There are other dividend paying stocks that pay quarterly that are close to ARR’s monthly dividend.  Verizon pays a nice quarterly dividend of 50 cents which works out to around 16.6 cents a month.  Of course you’re not going to make as much money because you can’t buy as many shares at $43 a share but it’s a nice way to diversify your dividend portfolio.