59-Year-Old Earning $15,000 a Month in Dividends Shares Top 4 Stock Picks – 'Lot of Frugal Living the Last 30 Years'

Dividend stocks are gaining investors' attention because of their downside protection during tough economic times. A T. Rowe Price report showed that dividend growth stocks in the Russell 1000 Index outperformed the broader index by 5.88 percentage points during down markets over a period of 35 years through December 2020. But which dividend stocks should you choose for long-term gains? Let's see a case study for ideas.

A few days ago, someone asked for opinions and advice on dividend investing from old, experienced investors nearing retirement on r/Dividends, a community on Reddit with over 660,000 followers. The investor specifically wanted to know how to reduce tax liabilities and risks while investing in dividend stocks. The post received an overwhelming response, with many Redditors sharing their portfolio details and advice. 

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An investor, 59, said he retired two years ago and was making $15,000 per month in dividend income. He reinvests most of his dividend income as he lives mostly off his rental income, pension and wife's social security. Most of his dividend investments were held in Roth IRA accounts.

 "Lot of frugal living the last 30 years TBH," he said in a comment while posting his detailed income report on Reddit about a year ago.

The investor said he was considering taking Social Security when he turns 62 and estimated his monthly income from it to be about $2,500.

Based on the details he shared publicly on Reddit, let’s examine the top dividend holdings in his portfolio.

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JPMorgan Equity Premium Income ETF 

The investor earning $15,000 per month in dividend income said JPMorgan Equity Premium Income ETF (JEPI) was among his biggest holdings. About a year ago, he shared his portfolio screenshot on Reddit which showed about 27% of his total portfolio was allocated to JEPI.

JPMorgan Equity Premium Income ETF (JEPI) makes money by investing in some of the most notable large-cap U.S. stocks and selling call options. JEPI is ideal for those looking for exposure to defensive stocks. JEPI usually underperforms during bull markets and protects investors against huge losses during bear markets since most of its portfolio consists of large, defensive equities like Trane Technologies PLC TT, Southern Co SO, Progressive Corp PGR among many others.

JPMorgan Nasdaq Equity Premium Income ETF

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) was a key position in the portfolio, generating about $15,000 per month in dividend income. JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) is a covered call ETF that distributes monthly dividend income. It invests in Nasdaq companies and generates extra income by selling call options. The fund has a dividend yield of more than 9%.

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Schwab U.S. Dividend Equity ETF

The investor making $15,000 per month in dividends said in a separate comment about a few months back on Reddit that Schwab U.S. Dividend Equity ETF (SCHD) was his top position and he had over 22,800 shares of the fund.

Schwab U.S. Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index and exposes you to some of the top dividend stocks trading in the U.S., including Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie. 

Amplify CWP Enhanced Dividend Income ETF

Amplify CWP Enhanced Dividend Income ETF (DIVO) is an income ETF that invests in companies with strong dividend growth records and sells covered calls to generate monthly income for investors. Some of the top holdings of the ETF include UnitedHealth, JPMorgan, Caterpillar, Home Depot and Procter & Gamble. The ETF has over $3.9 billion in assets and has gained popularity on Reddit lately.

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