How much to invest to make $4,000 a month?
Too many people are paid a lot of money to tell investors that yields like that are impossible. But the truth is you can get a 9.5% yield today--and even more. But even at 9.5%, we're talking about a middle-class income of $4,000 per month on an investment of just a touch over $500K.
If you want to make $4,000 per month from a passive investment, you could do it by investing $100,000 once and getting a steady 4% monthly return.
To generate $5,000 per month in dividends, you would need a portfolio value of approximately $1 million invested in stocks with an average dividend yield of 5%. For example, Johnson & Johnson stock currently yields 2.7% annually. $1 million invested would generate about $27,000 per year or $2,250 per month.
To reach your $4,000 monthly income goal, consider diversifying your income sources. This may involve starting a side business, freelancing, investing in stocks or real estate, or taking on part-time work. Multiple streams of income can help you reach your target more quickly.
Investing $1,000 a month for 20 years would leave you with around $687,306. The specific amount you end up with depends on your returns -- the S&P 500 has averaged 10% returns over the last 50 years. The more you invest (and the earlier), the more you can take advantage of compound growth.
Rate of return | 10 years | 40 years |
---|---|---|
4% | $72,000 | $570,200 |
6% | $79,000 | $928,600 |
8% | $86,900 | $1,554,300 |
10% | $95,600 | $2,655,600 |
A well-constructed dividend portfolio could potentially yield anywhere from 2% to 8% per year. This means, to earn $3,000 monthly from dividend stocks, the required initial investment could range from $450,000 to $1.8 million, depending on the yield. Furthermore, potential capital gains can add to your total returns.
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.
Dividend-paying Stocks
Shares of public companies that split profits with shareholders by paying cash dividends yield between 2% and 6% a year. With that in mind, putting $250,000 into low-yielding dividend stocks or $83,333 into high-yielding shares will get your $500 a month.
If you invested $500 a month for 10 years and earned a 4% rate of return, you'd have $73,625 today. If you invested $500 a month for 10 years and earned a 6% rate of return, you'd have $81,940 today. If you invested $500 a month for 10 years and earned an 8% rate of return, you'd have $91,473 today.
How much do I need to invest to make 6000 a month?
Savings account earn maybe 2% in interest. You want $6000 a month or $72,000 per year. You need $3,600,000.00 in cash.
How much is your salary? $4,000 monthly is how much per hour? If you make $4,000 per month, your hourly salary would be $23.08.
If you invest $1,000 per month, you'll have $1 million in 25.5 years. Data source: Author's calculations.
You can deposit money to save for long-term goals – buying a house in 10 years – or relatively shorter-term goals, such as a wedding in two years. $1,000 at 0.01 percent APY will only be $1,001 at the end of 10 years. But $1,000 at 5 percent APY will be $1,629 after 10 years.
The Bottom Line
Investing $100 a month adds up over time, especially with compound interest. Making small sacrifices every day to consistently add $100 to your stock investments every month will benefit you in the long run. Federal Deposit Insurance Corporation. "Understanding Deposit Insurance."
This chart shows you how, over a period of 30 years, investing $50 every week could grow your portfolio to more than $1 million. Chart by author. Assuming a 15% annual growth rate (on average), a $50 per-week investment could grow to a value of more than $1.5 million after 30 years.
For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
But when it comes to what they need to be saving, it depends. So, if we're starting with a 30-year-old, they should be probably saving close to $580, $600, at least, a month. And that's if they're going to earn a high rate of return. So it depends on how aggressive and risky that they're looking to be.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
While not all monthly income stocks are worth buying, some stand out for all the right reasons. If you want to generate $300 in super-safe monthly dividend income, all you'd need to do is invest $37,800 (split equally, three ways) into the following three ultra-high-yield stocks, which sport an average yield of 9.52%!
How much to invest to make $200 a month?
Those who are able to save a significant amount beyond their retirement account contributions may be able to generate $200 monthly in interest. “If you have $50,000 in a high-yield savings account offering 5% APY, that's $200 a month right there,” Henry says.
It's a matter of how you're investing
In that case, investing $100 a month over 40 years will leave you with an ending balance of around $531,000. Meanwhile, you'll only be contributing a total of $48,000 to get to that point. So all told, you're looking at a $483,000 gain, which is pretty impressive.
But the truth is you can get a 9.5% yield today--and even more. But even at 9.5%, we're talking about a middle-class income of $4,000 per month on an investment of just a touch over $500K. Below, I'll reveal how to start building a portfolio that could get you an even bigger income stream than this today.
However, the investment amount required to produce the desired income is considerable. To make $2,000 in dividend income, the investment amount and rate of return must be $400,000 and 6%, respectively. If the rate is lower, say 4%, the upfront investment is $600,000.
In a market that generates a 2% annual yield, you would need to invest $600,000 up front in order to reliably generate $12,000 per year (or $1,000 per month) in dividend payments.
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