How many streams of income do you have?

[Scallywag]

DH's job now, then SS, retirement a/cs etc

I don't have the stomach for rental real estate even though that's where my parents made their fortune. Don't know how you folks do it!

[Scallywag]

Investments definitely count.

In 2020, our investment accounts generated $43,500 in income. It was pretty much all reinvested but in retirement, that will start being our spending money. That will be our "paycheck".

Can portfilio made up entirely of VOO & VTI generate that much in dividends? Do you also have bonds and individual dividend paying stocks?

[TexasHusker]

Can portfilio made up entirely of VOO & VTI generate that much in dividends? Do you also have bonds and individual dividend paying stocks?

Absolutely it can! The average dividend yield between those two is 1.3%. So if $43,500 is 1.3% of the total value of the shares, you're all set. That would approx. $4.3 million.

[Scallywag]

Absolutely it can! The average dividend yield between those two is 1.3%. So if $43,500 is 1.3% of the total value of the shares, you're all set. That would approx. $4.3 million.

Yes, you would have to have a pretty large underlying portfolio of VTI & VOO to generate around 50K a year in income.

At 1.5% dividend yield, you need around 2.8 million to generate 43K a year. Maybe I'm math challenged?

OTOH, if I had a 4 million dollar portfolio at retirement, i wouldn't care what the dividend yield is. I'd just be glad i had that much and at much less risk than individual stocks.

[disneysteve]

Can portfilio made up entirely of VOO & VTI generate that much in dividends? Do you also have bonds and individual dividend paying stocks?

Our portfolio isn't that simple. We have numerous mutual funds and not all are indexes. We also have bonds and dividend-paying stocks.

It's not hard for income to really start adding up. As TH pointed out, even a 1.3% return becomes a significant amount as your portfolio grows. We're not anywhere close to $3.3 million yet (it's actually 3.3, not 4.3 for that calculation), but we also have funds with greater than 1.3% yields. VYM is yielding 2.76%, for example.

[Scallywag]

Our portfolio isn't that simple. We have numerous mutual funds and not all are indexes. We also have bonds and dividend-paying stocks.

It's not hard for income to really start adding up. As TH pointed out, even a 1.3% return becomes a significant amount as your portfolio grows. We're not anywhere close to $3.3 million yet (it's actually 3.3, not 4.3 for that calculation), but we also have funds with greater than 1.3% yields. VYM is yielding 2.76%, for example.

I recently went and completely moved to a Boglehead portfolio - VTI, VXUS but no bonds. Instead, I picked VOO. This is now our portfolio across ALL our retirement assets. No more individual stocks or actively managed mutual funds.

I calculated the portfolio --- that at a 1.5% dividend rate produces 43K --- to be around 2.8 million dollars.

0.015x = 43000, so x (approx) = 2.8 million.

0.013x = 43000, so x (approx) = 3.3 million.

That's amazing what a simple 0.002% increase in dividend can do to the final result!

But it's wonderful you're getting 43K in annual income now. I'm jealous!

Well done! Congratulations!

[disneysteve]

I recently went and completely moved to a Boglehead portfolio - VTI, VXUS but no bonds. Instead, I picked VOO. This is now our portfolio across ALL our retirement assets. No more individual stocks or actively managed mutual funds.

i don't get the math. I calculated the portfolio --- that at a 1.5% dividend rate produces 43K --- to be around 2.8 million dollars.

0.015x = 43000, so x (approx) = 2.8 million.

But it's wonderful you're getting 43K in annual income now. I'm jealous!

Well done! Congratulations!

Yeah, we got the 43K on about 1.7 million. Keep in mind that it's not all dividends. Some funds also pay out capital gains. Fortunately, most of this income is within retirement accounts so taxes aren't an issue. About 14K of it was taxable.

[srblanco7]

my W2, DW's W2, dividends and cap gains. Looking forward to exiting the world of W2 income in 21 months (not that I'm counting ). Historically, we'd always reinvested our dividend and cap gains. I stopped that at the start of this year in order to rebuild a cash cushion. Was a bit surprised, that in Q1 we generated $22k in cash from dividends and cap gains. This is generally consistent with 2020 when we had $84k (50/50 split) in dividends and cap gains.

[disneysteve]

my W2, DW's W2, dividends and cap gains. Looking forward to exiting the world of W2 income in 21 months (not that I'm counting ). Historically, we'd always reinvested our dividend and cap gains. I stopped that at the start of this year in order to rebuild a cash cushion. Was a bit surprised, that in Q1 we generated $22k in cash from dividends and cap gains. This is generally consistent with 2020 when we had $84k (50/50 split) in dividends and cap gains.

You're doing great! If we were getting 84K in income, I'd be preparing to hang it up, too. How exciting to have an exit date. 21 months will go by before you know it.

Personally, I'm also hoping to be able to get out by the end of next year but don't have a definitive plan in place yet. I have to wait until my cousin passes (which I'm not in any hurry for of course) and I settle his affairs. Once that's done, I'll know exactly what we have to work with. If it ends up being reasonably close to my expectations, we should be sitting on about 30 times expenses and be all set.

[srblanco7]

You're doing great! If we were getting 84K in income, I'd be preparing to hang it up, too. How exciting to have an exit date. 21 months will go by before you know it.

Personally, I'm also hoping to be able to get out by the end of next year but don't have a definitive plan in place yet. I have to wait until my cousin passes (which I'm not in any hurry for of course) and I settle his affairs. Once that's done, I'll know exactly what we have to work with. If it ends up being reasonably close to my expectations, we should be sitting on about 30 times expenses and be all set.

Thanks DS. 21 months seems fairly distant to me at present, so I'm hopeful if does indeed pass quickly, and yet, I'm wondering if I'll get "one more year" (aka cold feet) syndrome as we approach our exit date.

Sounds like your on a similar timeline, congratulations! I

[disneysteve]

I'm wondering if I'll get "one more year" (aka cold feet) syndrome as we approach our exit date.

I have no doubt I will get the OMY thing. I just know how my brain works. Fortunately (or unfortunately) my job is such that I may have the option to go part time (20 or 24 hours/week) or per diem (minimum 8 hrs/month) if I choose to. Assuming we will be staying in the area, I may do the per diem option initially just to keep my hand in things and have the back up source of income if needed (even though I'm confident it won't be needed) as a safety net.

[Jordan53]

Salary
Dividends
Interest

[amarowsky]

Jobs (realtor + Photographer)
Garden Sales (kinda a hobby/ job, but the sun does the heavy energy lifting - passively. + it averages out to few hundred a month$$$$)
Dividends (from taxable REIT's, Typical Index funds, +Close ended funds)
Capital Gains (Stocks & Crypto)
Interest - (I have (2) loans out , that folks are paying me interest on. One's almost done, the other is larger & complicated [bro paying me instead of bank on a rental we own jointly] + Normal interest.
Rental Real Estate - Have 1/2 ownership over 1 home, and 33% stake in the 2nd. (***passive after you put in the work to acquire & prepare the asset)
Royalties - T-shirt sales I have on amazon. (Very low sales, ~$1-20 per month, just now starting add campaigns)
Hobbies - I have a decent workshop in garage set up for bicycle work, wood working, wood harvesting/shaping tools, and some other semi-tool dependent hobbies. ***Not passive, but I do lend the workshop out to friends projects (doing an ebike build w/ a friend now on 3 bikes). SO there is some opportunity for passive income, if I "lease" my resources to people.


***Underlined are the "most passive" ones. Nothing is 100% passive, as you have to acquire it or have it given to you. But I think this is a decent list above!

****Keep in mind.... I had to resign from a Full Time + Corporate job to enable me to do most of these things! I just adore the variety of my every day and week these days. it's a ton of work overall, but utterly satisfying for my style of human. (and rewarding to not relying on any one thing too heavily)

[ZoeuLX]

Most of my passive income comes from advertising, thanks to video game streams on Twitch. What about you?

[Nutria]

In my mind, if dividends and CG are reinvested, then they do not count as income streams. (Asset growth? Yes.)

Thus, my only income stream is W-2.