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Financial independence doesn’t always require a fortune but rather a smart strategy. With the right dividend portfolio, even modest savings can generate enough passive income to fund a comfortable lifestyle in low-cost regions. The secret is balancing yield, safety, and smart spending.
One Redditor, grappling with this exact scenario of needing a certain passive income per month from dividends, shared his concerns with a community of investors on the online discussion board. He asked the community for advice on which assets to invest his $100,000 in order to generate $5,000 per month, beat inflation, and preserve capital. He also mentioned that he wants to bypass dividend yield traps.
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“I would consider [real estate investment trusts] like [Realty Income Corporation (NYSE: O)] right now, or [NNN REIT (NYSE: NNN)] with yield exactly 5% after [withholding tax]. But what else? I know it may sound silly to some of you but there are countries where you could live off from it over a nice quarter,” he wrote.
Now, let’s dive into the advice he received from Reddit’s dividend community on how to make this dream a reality.
Where to Invest $100,000 to Generate $5,000 in Passive Income Per Month? Reddit Jumps With Suggestions
Consider Higher-Yield Plays Like Dividend ETFs, REITs, and BDCs
While the poster mentioned he doesn’t want to invest in high-yield traps, many Redditors recommended several dividend ETFs, real estate investment trusts, and business development companies that generate a higher yield but are seen as safe by them.
“What about [JPMorgan Equity Premium Income ETF (NYSE: JEPI)] and [JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ)]? They yield 8% to 10% before taxes,” a commenter suggested.
Trending: Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” Here’s how you can earn passive income with just $100.
Suggesting business development companies, this Redditor recommended an investment strategy: “8% rule with [business development companies]. Invest in [business development companies] that yield more than 8%, use 8% for you, and reinvest anything above that to make sure your income keeps growing.”
