The Math Behind Making $100,000 Each Year Through Dividend Investing

A thorough analysis of dividend investing to reach our number

How much money would it take to make $100,000 each year through dividend investing?

Dividend stocks are attractive investments because most of them pay you each quarter just for holding onto them.

Some companies pay monthly, bi-annual, or annual dividends, but most stocks pay a quarterly dividend.

Some companies like Apple pay a measly dividend (0.71% yield as of writing). These are growth companies which will raise their dividends over time and are still prime for stock price appreciation.

Then there are stocks like AT&T that offer juicy dividends but dimming growth prospects. Their 7.48% dividend yield is higher than most stocks, but the dividend doesn’t offset the fact that AT&T stock’s returns have consistently underperformed the market.

As a dividend investor, it’s important to buy solid companies primed to appreciate and increase their dividend payments over time. Just because a dividend stock provides a high yield doesn’t mean it’s an attractive investment.

To figure out how we’ll reach $100,000 each year through dividend, we need to know two key numbers: