How to Earn $100/Month in Dividends by Investing Just $11,000 Today
Earning $100 a month is certainly a milestone achievement for a dividend investor. This totals to a respectable $1,200 per annum! Most ‘good’ dividend-paying companies have a yield of around 3% – 5%. But the problem for a beginner investor is, with less capital, these yields are not going to earn you a whole lot of income from dividends.
I have been tracking my dividend investing journey in Canada for a few months now. While I’m quite satisfied with the 6% – 8% average yield on all my investments, you will be able to see that I only earn less than $10/month as of now. So, the journey is quite slow and a test of patience.
If you have an extra $11,000 you are looking to invest, there are a few options. In this article, we are going to explain how to maximize the yield on your investment.
How to make $100/Month in Dividend income with $11,000
Below are the conditions you should follow;
- Invest $11,000 in the beginning,
- Invest in a company that pays ~10% dividend yield per annum (paid out monthly),
- Re-invest the dividend income for one year,
- Let the investment grow for one year.
The mathematics behind the dividend earning is pretty simple;
Month | Total Investment | Dividend/month |
1 | $11,000.00 | $91.67 |
2 | $11,091.67 | $92.43 |
3 | $11,184.10 | $93.20 |
4 | $11,277.30 | $93.98 |
5 | $11,371.28 | $94.76 |
6 | $11,466.04 | $95.55 |
7 | $11,561.59 | $96.35 |
8 | $11,657.93 | $97.15 |
9 | $11,755.08 | $97.96 |
10 | $11,853.04 | $98.78 |
11 | $11,951.82 | $99.60 |
12 | $12,051.42 | $100.43 |
Total | $12,151.84 | $1,151,.84 |
Re-investing your dividend income and earning dividend income on the previous month’s dividend income is the fastest way to grow your money if you are a dividend investor. This is called compound investing.
According to the table above, you can see how you will touch $100/month if you carefully screen for high-yield dividend stocks.
The math works. But finding companies of such high yields can be tricky. Fortunately, we have some suggestions for you.
Company (Ticker) | Share price (June 22, 2021) | Dividend Yield |
1. Canoe EIT Income Fund (EIT-UN.TO) | $11.96 | 10.03% |
2. ARMOUR Residential REIT, Inc. (ARR) | $11.44 | 10.49% |
3. Dividend 15 Split Corp. (DFN.TO) | $8.39 | 14.35% |
Keep in mind that these tickers are mere suggestions only. Every investment comes with varying degrees of risk. So, make sure to do your own research before investing your hard-earned money into the stock market.
There are plenty more stocks, split share companies, ETFs, and income funds out there that provide above 10% dividend yields.