This video explains how to build a dividend-paying Fidelity Index Fund portfolio that can potentially cover living expenses without selling stocks. It contrasts index fund investing with riskier strategies like real estate or stock picking, emphasizes total return (yield, growth, and appreciation) over chasing high yields, and provides a specific mix of Fidelity Index Funds. The video also calculates the minimum investment needed to achieve $5,000 per month in income and shows how to reach that goal faster with a different investment strategy.
To achieve $5,000 per month ($60,000 per year) in dividend income using the S&P 500 ETFs mentioned (with an average yield of 1.27%), the video calculates you would need to invest approximately $4.72 million.
However, for the recommended Fidelity Index Fund portfolio, the video shows that after 30 years of investing $1,000 initially and $1 per day ($360 per year), the portfolio would be worth $441,188 and generate $79,729 in annual dividends, which is about $6,644 per month.
To reach the $5,000 a month income goal 10 years faster (in 20 years), the video suggests starting with $20,000 and contributing $20 per day. At that point, the portfolio would be worth $914,971 and generate $68,698 in annual dividends ($5,725 per month).
