"looking for a road map of specific assets that may generate such performance, let's dive into three groupings of assets and specific holdings within each asset class that investors can rely on for such dividend income over long periods of time. I'm going to assume an overall average yield of around 5% for this portfolio of assets which can generate $100,000 in annual income. That means investors looking for such a passive income stream will need to have at least $2 million invested."
"I'm a long-term believer in the idea that equities ought to play a major role in retirement planning for most households. The thing is, for those looking to generate considerable yield, picking and choosing individual stocks that fit this profile can be trickier than it may seem on the surface. That's because many of the highest-yielding stocks are also the riskiest. That stands to reason, given that yields move inversely to price."
Portfolio construction requires balancing asset classes, sectors, and durations to meet income goals. A diversified mix of dividend stocks, bonds, and REITs can target an average portfolio yield near 5%, requiring roughly $2 million to generate $100,000 annually. Equities remain important for long-term retirement planning, but high nominal yields often signal elevated risk because yields rise when prices fall. Investors should favor diversified holdings rather than chasing the highest yields, and combine reliable dividend-paying stocks with fixed income and real estate investment trusts to smooth income and reduce concentration risk over long periods.
Read at 24/7 Wall St.
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