Wondering how to live off dividends? You’re not the only one. Having a dividend supported life is a retirement dream but few are able to achieve it. So, today, let’s talk about how you can plan a life living off your dividends!
Is It Possible To Live Off Dividends?
Living off dividends is the ultimate dream. You’re getting regular money coming in, you’re set for life and you can live out exactly how you want to. But there are so few people who actually achieve living off dividends, so it makes you wonder if it’s really possible.
But yes, it is possible to live off dividends. However, you need to be smart about planning your retirement future or your future dividend life won’t be as amazing as you dreamed it would be. So, if you’re planning on doing this, here are a few things you’ll want to do:
Figure Out How Much You Need
Many people don’t really plan for retirement. They think they do, but they set up a plan and never revisit it again. But if you want to truly live off dividends in your retirement years, you need to figure out exactly how much you need so you don’t run into financial issues.
Don’t Dip Into Your Principle
When it comes to living off your dividends, you should NEVER touch your principle. That means the money that you put in to invest should never come out. If it does, you’re not truly living off your dividends and you’re more likely to run out.
Your principle should always be invested and making you money, and all of the money you need to live your day-to-day life should come right from your dividends. You should only be using the money that you make to actually live off.
Start As Soon As You Can
The sooner you start to build up your retirement portfolio, the better chance that you’ll actually be able to live off dividends. When you’re young, it’s easy to push off retirement, but the earlier you start the easier it is to truly make that happen.
If you’re just starting your working career fresh out of school, then make sure you figure out what you have available. Take advantage of every future investment opportunity you have (pending it makes sense for you and your situation) and make sure you have retirement on your mind.
When it comes to creating a robust portfolio that will sustain you through your retirement, you need to continuously invest. The money you make from your investments should be put back into dividends to make more.
The earlier you start, the more you’ll (theoretically) make. Keep reinvesting to make bulk up that retirement fund so that you can truly live off your dividends.
Do you live off dividends? Share your best tip below!
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