Dividend Investor Retired at 39 Living Off Dividend Income Shares His Top 4 Stocks – 'It's Absolutely Doable'

The early retirement trend that gained popularity during the pandemic is still spreading widely among millions of Americans. Data from the Federal Reserve Bank of New York showed that the percentage of Americans expecting to remain in the workforce at the age of 62 fell to 45.8% in March, marking its lowest level since 2014.

About two years ago, someone asked r/Dividends – a community of over 650,000 members on Reddit – whether anyone was living entirely off dividends after retiring early. The questioner said he wanted to plan for $40,000 per year in expenses "solely generated" from investments.

The question sparked a lively discussion on the social platform and received over a hundred comments.

Don't Miss:

• Unlock the hidden potential of commercial real estate — This platform allows individuals to invest in commercial real estate offering a 12% target yield with a bonus 1% return boost today!
• This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100 for properties like the Byer House from Stranger Things.

An investor, 48, said he retired at the age of 39 and was currently living off dividend income and interest.

"It's absolutely doable. I live off dividends (and interest) and only resort to selling stocks when I want to rebalance or there is a large planned purchase. I retired at 39 and I'm 48 now. I've yet to need to touch my retirement accounts," he said.

The investor supported a balanced approach, saying he does not "chase" dividends but doesn't avoid them either.

"Arguments about dividends being the same as selling stock is a stupid argument," he added.

Based on the details he shared publicly on Reddit, let’s examine this investor’s key holdings.

Vanguard S&P 500 ETF 

The Vanguard S&P 500 ETF (VOO) was among the top holdings of the investor who retired at the age of 39 and lived off dividend income. VOO is one of the best ways to gain exposure to the broader U.S. market and earn steady dividend income. The fund gained about 21% in the last 12 months. The fund has about 500 stocks in its portfolio. Apple, Nvidia, Microsoft, Meta Platforms, Alphabet and Tesla are among the top holdings in the VOO portfolio.

See Also: ‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum.

Schwab U.S. Dividend Equity ETF

The Schwab U.S. Dividend Equity ETF (SCHD) has gained popularity among investors on Reddit thanks to its broader market exposure and dividends. According to Benzinga Pro, SCHD yields about 3.6%. Pfizer, AbbVie, Cisco, Coca-Cola, Texas Instruments and Bristol Myers Squibb are among the fund’s biggest holdings.

Vanguard Real Estate ETF

The Vanguard Real Estate ETF (VNQ) was one of the key holdings of the investor who retired at 39 and lived off dividends. VNQ invests in REITs and has a dividend yield of about 3.8%. It pays quarterly. Some of the biggest holdings in the fund's portfolio include Prologis, American Tower, Equinix, WellTower, Digital Realty and Simon Property, among many others. VNQ is down 1.7% over the past 12 months.

Trending: Commercial real estate has historically outperformed the stock market, and this platform allows individuals to invest in commercial real estate with as little as $5,000 offering a 12% target yield with a bonus 1% return boost today!

Vanguard Total International Stock ETF

The investor's portfolio also included Vanguard Total International Stock ETF (VXUS). The fund gives investors exposure to international equities trading outside of the U.S. VXUS has a dividend yield of about 3.4% and pays quarterly. The fund's portfolio consists of over 8,500 stocks. Some of the biggest holdings include Taiwan Semiconductor, Novo Nordisk, Tencent, Nestle, SAP and Novartis.

Municipal Bonds

The investor living off dividends said he also had a "portfolio" of municipal bonds. Municipal bonds are debt securities issued by local government bodies. They are gaining popularity amid their lower risks and tax exemptions. 

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.

Looking For Higher-Yield Opportunities In A Shifting Market?

The changing interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider. 

For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga Readers: Earn a 1% return boost on your first EquityMultiple investment when you sign up here (accredited investors only).

Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings.