Massive $1.5 Million Inheritance At 26 Sparks Urgent Question On Reddit – 'What Stocks Let Me Live Off Dividends And Still Build Wealth?'

Comments
Loading...

Receiving a windfall, especially at a very young age, can be life-changing. For many people, it’s the best opportunity to secure their financial freedom and build wealth. Still, others might let it slide, missing out on the chance to grow their wealth.

For those who choose to invest, the charm of dividend stocks is undeniable, and the idea of living off dividends and still growing the money instead of working a 9-to-5 is a dream many want to reach. But how realistic is it and how do you make this happen?

Don't Miss:

This is the question a 26-year-old Reddit user asked after he found out he will inherit $1.5 million worth of land. In a post that started a thread in the r/Dividends community, the individual sought advice on how to turn the money into a reliable income stream.

“How do I live off of the dividends worth $1.5 million if I invest all my money in stocks? And at the same time, grow my money?” the 26-year-old asked.

The post sparked a flurry of responses, with Redditors offering varying suggestions, from holding onto the land to investing in certain dividend-paying ETFs. Let’s delve into commenters’ advice.

Trending: CEO of Integris gathered a team of senior investment managers who have $34.22 billion in combined owned and managed assets in the West Coast — here’s how to invest in their private credit fund that targets 12% annual interest rate.

Where Should a 26-Year-Old Invest $1.5 Million Windfall? Reddit’s Advice

Hold on to the Land Because it’s a Finite Resource

Many Redditors disagreed with the idea of selling the piece of land and instead recommended the poster keep it and possibly rent it.

“Don't sell the land. Lease it. There are ways to make money off the land. Don't sell,” a comment says.

“My wife’s grandpa always said ‘land is the one thing they aren’t making more of’,” another Redditor wrote.

Another commenter suggested the poster lease the land if it’s farmable and use the lease money to buy dividend-focused ETFs.

“If the land is farmable, lease it. Use that money to put into the market for dividend ETFs, then take those dividend income and buy underlying shares. Keep doing that for the next 20 years,” he said.

Trending: Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum. 

Invest in Dividend ETFs for Stability and Growth

For those pro selling the land, dividend-paying ETFs like Schwab U.S. Dividend Equity ETF SCHD and Vanguard S&P 500 ETF VOO were frequently mentioned.

“Go to DRIPcalc and put in SCHD to get a baseline. With their default values, you’d get about $58,000 in dividends per year without any price changes in the underlying stock,” a Redditor wrote.

Another user said, “$1.5 million in SCHD with a dividend reinvestment plan gets you to $5 million in 10 years.”

See Also: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100.

Diversify with High-Yield Dividend Stocks and Balance Between Growth and Income

Several Reddit users suggested diversifying into high-yield dividend stocks to grow the income.

“Split maybe 60% among [JPMorgan Equity Premium Income ETF JEPI], [JPMorgan Nasdaq Equity Premium Income ETF JEPQ], [Main Street Capital Corporation MAIN], [Ares Capital Corporation ARCC], etc., and put the last bit into something with a bit more upside, like [Innovative Industrial Properties, Inc. IIPR],” a recommendation says.

Some users advised the poster to consider a more balanced approach, mixing growth-focused investments with dividend-paying assets.

“Invest all but $100,000 into VOO or [SPRG Portfolio S&P 500 ETF SPLG]… Continue to max out your Roth IRA and buy [Invesco QQQ Trust QQQ] or [Invesco NASDAQ 100 ETF QQQM] into your Roth IRA. Do not ever touch or sell the VOO or SPLG from your inheritance, except for the cash dividends it gives you,” a comment reads.

Another Reddit member recommended VOO as a great investment for the long run.

“You could put everything into VOO. It yields 1.24%, which would be $18,600 to start but could rise over time. Over the very long term, VOO is almost guaranteed to grow, so you would have a much larger investment down the line,” he suggested.

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.

Interest Rates Are Falling, But These Yields Aren't Going Anywhere

Lower interest rates mean some investments won't yield what they did in months past, but you don't have to lose those gains. Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities.

Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.

Market News and Data brought to you by Benzinga APIs

Posted In: