Want $4,000 per Year in Monthly Passive Income? Invest Just $2,500 in These Yield-Heavy Dividend Stocks

"It would be an impressive feat to generate $4,000 in yearly passive income with just $12,500 in your account. Yet, it's actually possible if you invest $2,500 into five carefully chosen stocks or exchange traded funds (ETFs). Not only that, but you could get paid cash distributions every month and possibly even every week. The plan is to own high-yield stocks that represent profitable businesses which pay monthly dividends. Also, you can own some ETFs offering big yields and frequent cash payouts."

"Allocating $2,500 toward the five assets on today's list means you'd be investing $12,500 in total. It's possible to earn $4,000 per year in dividends/distributions is you achieve an average yield of at least $4,000 / $12,500 or 32%. Sure, that's ambitious and these five stocks/ETFs carry some risk; for example, any of the annual yields might get cut. On the other hand, you could become a passive income overachiever simply by holding five assets, so let's start off with two high-paying stock picks."

"We'll begin with Oxford Square Capital Corp. ( NASDAQ:OXSQ), a business development company mainly specializing in bank loans and collateralized loan obligations (CLOs). Since Oxford Square Capital Corp. sends out its cash dividends on a monthly basis, you can take advantage of frequent reinvestment and compounding opportunities. It's smart to focus on income-positive businesses in order to mitigate your overall risk level. As it turns out, Oxford Square Capital Corp. is income-positive as it reported roughly $5.56 million of third-quarter 2025 net investment income."

Allocate $2,500 to each of five high-yield stocks or ETFs to invest $12,500 total and target $4,000 annual passive income, requiring an average yield of roughly 32%. Focus on assets that pay monthly or frequent cash distributions to enable compounding and reinvestment. Include income-positive businesses and mega-yield ETFs to raise overall portfolio yield. Oxford Square Capital Corp. (OXSQ) is a business development company concentrating on bank loans and CLOs, pays monthly dividends, reported about $5.56 million of third-quarter 2025 net investment income, and offers a 22.46% forward annual dividend yield. High yields carry risk of cuts.

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