Collect $47,000 In Dividend Checks With This 3-Part Strategy


If you're a regular reader of StreetAuthority, you know I love getting -- and reinvesting --dividend paychecks.

Simplyput , my goal is to earn a paycheck every day of the month by owning a basket of solidincome securities -- and then grow the size of those paychecks by harnessing the power ofcompounding throughdividend reinvestment.

So far, the results have been very rewarding. From an initial $200,000investment , I'm earning nearly $16,000 in dividends ayear (or more than $1,300 a month) using this strategy. And that doesn't even include a penny from the healthycapital gains I've made from most of my holdings.

But as I said, you may have already heard this before. My goal today is to show you how to get the most out of yourincome investments using a simple yet effective three-part strategy.

Icall it the Dividend Trifecta , and it's the cornerstone of my advisory, The Daily Paycheck . The great thing about the Dividend Trifecta is that it's fully customizable to your own needs. You can use it to multiply yourwealth over time, preservecapital -- even bring in a secondincome tofund your retirement.

Here's how it works...

I have three separate portfolios within The Daily Paycheck , and each helps me achieve one part of the Dividend Trifecta strategy.

My High-Yield Opportunities portfolio offers higher yields but is a bit riskier when it comes tocapital preservation. The yields here start at about 7.5% and go up from there. Some of thesestocks andfunds yield 10% or more.

Although these are riskier, I take special care to choose only those securities thatoffer ample reward for the risk. Many of my high-yield holdings are long-established closed-endfunds , specializing in everything from utilities andreal estate to convertiblebonds .

My Fast Dividend Growers portfolio has the lowest yield of the three portfolios. But what it lacks inincome it makes up for in priceappreciation (the average total return for thesestocks is 58%). Thesestocks are increasingdividend payments by up to 15% ayear -- making them perfect if you want a rising stream ofincome but also the potential for heftycapital gains in the process.

The SteadyIncome Generators portfolio is full of dependable dividend-paying securities. These are some of the most reliabledividend payers on Earth. If you're a conservative investor, then theseinvestments can deliver consistent dividends -- no matter what happens in themarket .

When you own all three types of theseincome investments and reinvest the dividends, you can see some pretty dramatic results. I've received more than $47,000 individend paychecks so far in less than 42 months. But because I reinvested, my portfolios are now worth over $290,000 -- nearly a 46% total return since inception.

My three portfolios work together, producing the characteristics I'm looking for -- an overall approach that minimizes volatility andcapital risk while maximizing my monthlyincome .

I've now spent more than three years using this strategy. I love its simplicity. My dividends get reinvested every month without me having to lift a finger. Overall, the portfolio has been roughly 40% less volatile than the overallmarket . To me, that represents 40% more sleep-filled nights.

The Investing Answer: Your needs may be different than mine. The good news is that this strategy is fully scalable to any size portfolio and can be easily adjusted.

If, for instance, you have less tolerance forcapital losses in the shortterm , youwill want to own a smaller percentage of High-Yield Opportunities holdings in your personal portfolio. If you have a very longinvestment horizon and have lowerincome needs, you may want to hold a higher percentage of Fast Dividend Growers. And if you have a need for stable currentincome right now, then you are likely to find that SteadyIncome Generatorswill meet your needs.

Before I started using this strategy, I was anxious about creating a portfolio that couldsupport me once I retired. I'm no longer anxious. My Dividend Trifecta strategy is generating more and moreincome every month. And I know that when retirement comes, I can just flick off thedividend reinvestment switch and start living off theincome .

That's the kind of experience I want every Daily Paycheck reader to have.

P.S. -- There is plenty more to share about my Dividend Trifecta strategy, but I don't have the space to include it all here. That's why I've put together a special presentation that outlines how I find investments that allow me to earn $16,000 per year in extra income. To view this presentation -- and get the names and ticker symbols of a few high-yield picks to start your own "Daily Paycheck" portfolio -- click here.

This story originally ran at
My 3-Part Strategy For Collecting $47,000 In Dividend Checks

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Retirement

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