I'm sure many of you are interested at the prospect of earning passive income while you drink a Piña Colada on the beach. As am I, so I did some calculating to find out exactly how large and investment would be required to produce $100,000/yr from blue chip stocks.
The point is to invest into Dividend producing stocks that are part of the S&P 500. 3 different companies will be chosen with different payout schedules that will earn you $8,333.33/mth ($100,000/12mths).
For this study, we will be purchasing:
- Coca-Cola Co. (Jan, April, July. October)
- AT&T Inc. (February, May, August, November)
- IBM (March, June, Sept, December)
Calculation=8,333.33/0.40= 20,834 Total Shares
5,145 TS * $53.77
Total Investment = $1,120,244.18
Calculation=8,333.33/0.51= 16,340 Total Shares
16,340 TS * $33.34
Total Investment = $544,775.60
Calculation=8,333.33/1.62= 5,145 Total Shares
5,145 TS * $149.45
Total Investment = $768,920.25
With these 3 stocks, to create an income of $100,000/yr you would need to invest a grand total of $2,433,940.03.
That will create a return of 4.11% each year!
The goal is to create multiple flows of passive income. Then you can be truly free!!