48-Year-Old Dividend Investor Earning Nearly $20,000 Reveals Portfolio: 11 High-Yield Dividend Stocks and ETFs

Dividend investing has always attracted long-term investors for a variety of reasons. Famous American economist Jeremy Siegel mentions in his book The Fundamentals of Investing that about 97% of total stock market returns came from reinvested dividends in the past while just 3% came from capital gains. But which dividend stocks to buy for long-term wealth creation remains a key question. Let's turn to a real success story for ideas.

In January 2021, a dividend investor shared his investing journey and detailed income report with fellow investors on Reddit's r/Dividends board, a discussion forum with more than 600,000 members. 

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The Investor "Took Over" Control of His Portfolio From a Financial Advisor

The investor said he "took over" his portfolio in May 2020 with $264,000 and bought more stocks on the dip through the fall. He avoided what he referred to as “dead stocks,” citing examples like Coca-Cola, IBM and AT&T. At the time of posting his income report, the investor said his portfolio was worth $372,000. He was "a few hundred dollars" short of $20,000 a year in dividend income, with 10% growth in overall portfolio in terms of stock price appreciation. 

"It’s been a challenge to get here, but I’ve enjoyed the journey. Shout out to Tesla and the fat gains I made there. I no longer own any stock that doesn’t pay a dividend. I have no dividend traps and I didn’t chase yield. I do own a few CEFs and some ETFs. This market gave me the chance to start my own business so I can work from home and I hope this portfolio allows me to retire early. My goal now is to increase my dividends by $5k every year for the next five years. Good luck to those just starting out," he added.

The investor, who said he was 48, during the discussion elaborated on what he meant by taking control of his portfolio.

"I had investments handled through Edward Jones for years and they had done Ok, but growth was slow and it was all in Vanguard funds (which are fine), but after March crash, I wanted control of my assets."

The Dividend Investor's Thoughts on REITs

The investor had several high-yield REITs in his portfolio and he shared his thoughts on these stocks in a comment:

"I love reits right now. I imagine in a year or two they will stagnate a bit and I can roll the money elsewhere and keep my top ones. reits, at their beaten down evaluations, give me the most bang for my buck. I remember the 80s well and I wish I’d gotten into this earlier."

This portfolio included more than 100 stocks. For this analysis, we chose 10 of the highest-yielding stocks and ETFs.

WP Carey 

The investor earning $20,000 in annual dividend income said WP Carey Inc. WPC was among his three biggest positions. With a dividend yield of 5.8%, WP Carey Inc. is one of the top net lease REITs, managing over 1,200 properties across the U.S., Europe and other parts of the world. Retail stores, restaurants, automotive companies and grocery stores are among the REIT's tenants. 

CTO Realty Growth

CTO Realty Growth Inc. CTO has a dividend yield of about 7.8%. It's a Florida-based REIT focused on retail properties that pays quarterly dividends. A Redditor earning $20,000 per year reported CTO as one of his biggest holdings.

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UBS AG Etracs Crude Oil Shares Covered Call ETN

UBS AG Etracs Crude Oil Shares Covered Call ETN USOI is a covered call ETN linked to crude oil prices. It generates income by selling call options on crude oil, paying investors through option premiums. The ETN yields about 21% and pays monthly dividends. 

PIMCO Dynamic Income Fund

PIMCO Dynamic Income Fund PDI is another high-yield dividend fund in the portfolio of the Redditor earning $20,000 a year in dividend income. It's a fixed-income fund that invests in debt securities, including mortgage-backed securities and bonds from both developed and emerging markets. PDI yields about 16% and pays monthly dividends.

Global X SuperDividend ETF

Global X SuperDividend ETF SDIV is another high-yield monthly dividend fund in the investor’s portfolio, generating $20,000 per year in dividend income. The fund provides exposure to high-yield dividend stocks across various markets, including emerging ones. SDIV yields about 10%.

Global X Russell 2000 Covered Call ETF

Global X Russell 2000 Covered Call ETF RYLD was among the investor's top high-yield dividend holdings. RYLD generates income by selling call options on the small-cap-heavy Russell 2000 Index. The ETF yields about 12%. Being a covered call ETF, RYLD can incur losses during down markets. Analysts believe small-cap stocks may be prime beneficiaries in an easing monetary environment. 

Global X Nasdaq 100 Covered Call ETF

Global X Nasdaq 100 Covered Call ETF (QYLD) generates income by selling covered call options on the Nasdaq-100 Index. The fund was established in 2013 and has since provided monthly income to investors, yielding about 12%. Its top holdings include Apple, Nvidia, Microsoft, Amazon and Broadcom.

Global X SuperDividend REIT ETF

The Global X SuperDividend REIT ETF SRET offers exposure to some of the world’s top high-yield REIT stocks. It pays a dividend of about 8% monthly.

Redwood Trust 

Redwood Trust Inc RWT is a mortgage REIT with a dividend yield of about 9%. Last month, the company raised its dividends by over 6%. The stock is up 11% over the past year. 

Enterprise Products Partners

Midstream energy company Enterprise Products Partners LP EPD was another top high-yield dividend stock in the portfolio of the Redditor earning $20,000 a year in dividend income. The stock yields more than 7%.

NVE Corporation

NVE Corporation NVEC was an interesting name in the portfolio of the Redditor, who earned $20,000 in dividend income. The company makes spintronics, a type of nanotechnology that uses the spin of electrons instead of their charge to handle information. The investor said NVE was among his favorite stocks in the portfolio. NVE has a dividend yield of just over 5%.

Better Yields Than Some REITs?

The current interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through publicly-traded REITs.

Arrived Homes, the Jeff Bezos-backed investment platform, has launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a target 7% to 9% net annual yield paid to investors monthly. It paid 8.1% in August. The best part? Due to high demand the maximum investment amount is currently $5,000 with a minimum investment of ONLY $100.

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Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.