There’s a version of income investing that most people will never discover because it doesn’t get talked about the way growth stocks do. This income investing idea doesn’t have any of the usual financial drama, and you likely won’t find it trending on financial X.com, but it does pay you, every month, like a second job you don’t ever have to show up for. Consider this: try splitting $100,000 evenly across four specific ETFs right now, and you’re looking at more than $562 per month in dividend income. This is equivalent to $6,755 a year, and you didn’t have to sell a single share to get there, you didn’t have to take on any kind of concentrated risk that would keep most retirees up at night.
The reason this works isn’t some kind of financial magic, it’s all about asset diversification and most investors who chase dividend income will load up on equity-based dividend funds and call it a day. This might be good for some people, but it also means that all of your income is responding to the same market forces at the same time. When, not if, but when your equities are selling off, your dividend income is going to feel it. The same goes when rate expectations shift, as your entire portfolio will move in the same direction. Instead, the smarter approach is to build income from different sources like US equity dividends, enhanced equity income with options, preferred stock, and high-yield corporate bonds, so that if one layer is under pressure, the others might be holding or even benefiting.
This is exactly what this four-ETF allocation does, as each of the options below draws income from different layers in the capital structure, which means they don’t all respond to market stress or rate changes the same way. What you end up with isn’t just more income than Treasury bonds or savings accounts, but just durable income that can keep flowing through different kinds of markets that might affect other strategies that depend on a single asset class.
The Global X SuperDividend US ETF (NYSE:DIV) is the equity foundation of this strategy, and the strategy itself is pretty simple in that it holds 51 of the highest-yielding US dividend stocks, weighted toward income rather than market cap. What you are really getting is true exposure to real businesses that are generating real cash flow, like REITs, financials, utilities, and energy names that prioritize returning money to shareholders above almost anything else.
The current yield is 6.76%, with a $1.28 annual dividend paid out monthly, which means that on a $25,000 investment, this is like earning $140 per month. While this might not seem like a lot at first, consider that dividend growth for this ETF is 23.21%, a meaningful figure that signals the underlying companies are increasing payouts rather than merely maintaining them. The argument gets more concrete when you look at the 87.26% payout ratio, suggesting that the dividend is well-covered.
