How Investing $100 Per Week Can Create $1,500 in Annual Dividend Income (2024)

Andrew Button

·4 min read

How Investing $100 Per Week Can Create $1,500 in Annual Dividend Income (1)

Written by Andrew Button at The Motley Fool Canada

Did you know that you can get a substantial amount of dividend income by investing just $100 per week?

You’ll have to invest those $100 sums consistently over a period of time, of course. But if you stick with it, you can get to the point where you’re making $1,500 in annual dividend income after just three years of diligent saving. In this article, I will explore the numbers behind that and suggest some stocks that could make it happen for you.

$100 per week adds up to $15,600 in three years

The first thing we need to know is how much $100 per week works out to on an annualized basis. There are 52 weeks in a year. That means that, after a full year of saving, $100 per week adds up to $5,200. There is no sensible stock that will get you to $1,500 per year with $5,200 invested — that’s a 28% yield! — but there are stocks that could get you there after three years of saving. That takes you to $15,600 in cumulative savings.

ADVERTIsem*nT

At $15,600 saved, you need a 10% yield to get $1,500 per year. Although a 10% yield is very high, it’s not so high that a stock yielding that much is necessarily highly risky. I personally hold 10.3% yielder Oaktree Specialty Lending, and if you look at its historical financials and portfolio composition, you will see that it is far from an unusually risky company. That’s one stock you could invest in to get your $1,500 in dividend income, but this being a Canadian publication, we should look at some Canadian stocks that could generate $1,500 in annual dividend income with $15,600 invested.

One stock that could get you there

First National Financial (TSX:FN) is a Canadian non-bank lender with an extraordinarily high yield. At today’s prices, it yields 6.3% — that’s not quite enough to make the math in the previous paragraph work, but it could get there. You see, FN’s dividend has been growing over time. Over the last five years, the company has grown its dividend by 5.3% per year. It has raised the dividend for 12 years in a row. If FN were to keep growing its dividend at 5.3%, then it would reach a 10% yield on cost in eight years. It might sound like a drag to have to wait eight years for a stock to achieve the yield you want, but it needn’t necessarily take that long.

COMPANY

RECENT PRICE

NUMBER OF SHARES

DIVIDEND

TOTAL PAYOUT

FREQUENCY

First National Financial

$39.34

615

$0.61/quarter ($2.44/year)

$1,500.6

Quarterly

In its most recent quarter, First National delivered the following:

  • $129 billion in mortgages under administration, up 10%

  • $563 million in revenue, up 26%

  • $95.5 million in income minus the effect of fair value changes, up 98%

  • $83.6 million in net income, up 108%

  • $1.38 in diluted earnings per share, up 109%

This is much better growth than what First National did over most of the trailing five-year period, in which it grew its earnings at just 7% CAGR. Thanks to high interest rates, FN is growing its earnings more rapidly than it did in the past, when interest rates were low. So, it may be able to deliver dividend hikes at a faster pace going forward. If it does so, then it could become a 10% yielder for those buying it today.

The post How Investing $100 Per Week Can Create $1,500 in Annual Dividend Income appeared first on The Motley Fool Canada.

Should You Invest $1,000 In First National Financial Corporation?

Before you consider First National Financial Corporation, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 10 best starter stocks for investors to buy in 2024... and First National Financial Corporation wasn't on the list.

The online investing service they've run for a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 32 percentage points. And right now, they think there are 10 stocks that are better buys.

Get Our 10 Starter Stocks Today * Returns as of 12/22/23

More reading

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2024

How Investing $100 Per Week Can Create $1,500 in Annual Dividend Income (2024)

FAQs

How Investing $100 Per Week Can Create $1,500 in Annual Dividend Income? ›

Invest $100 per week in dividend stocks

How much do you need to invest to make $1000 month on dividends? ›

In a market that generates a 2% annual yield, you would need to invest $600,000 up front in order to reliably generate $12,000 per year (or $1,000 per month) in dividend payments. How Can You Make $1,000 Per Month In Dividends?

How much can you make in dividends with $100 K? ›

How Much Can You Make in Dividends with $100K?
Portfolio Dividend YieldDividend Payments With $100K
7%$7,000
8%$8,000
9%$9,000
10%$10,000
6 more rows
May 1, 2024

How much will I have if I save $100 a week for a year? ›

There are 52 weeks in a year. That means that, after a full year of saving, $100 per week adds up to $5,200.

How do you make $2000 in dividends? ›

Three high-yielding stocks that can help you generate some decent dividend income right now are Pfizer (NYSE: PFE), Bank of Nova Scotia (NYSE: BNS), and AT&T (NYSE: T). By investing $30,000 into these three stocks, you can expect to collect about $2,000 per year in dividends.

How much do I need to invest to make $500 a month in dividends? ›

That usually comes in quarterly, semi-annual or annual payments. Shares of public companies that split profits with shareholders by paying cash dividends yield between 2% and 6% a year. With that in mind, putting $250,000 into low-yielding dividend stocks or $83,333 into high-yielding shares will get your $500 a month.

How much do I need to invest to make $300 a month in dividends? ›

However, this isn't always the case. If you're looking to generate $300 in super safe monthly dividend income (note the emphasis on "monthly" income), simply invest $43,000, split equally, into the following two ultra-high-yield stocks, which sport an average yield of 8.39%!

Is investing $100 a week enough? ›

Investing a measly $100 per week can turn into a nest egg topping $1.1M by retirement — but you need to start at age 25. Here are 5 easy 'catch-up' tactics for older Americans. The earlier you start saving for retirement, the better your chances of building a comfortable nest egg.

What is the annual income for $100 a week? ›

$100 weekly is how much per year? If you make $100 per week, your Yearly salary would be $5,200. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week. How much tax do I pay if I make $100 per week?

How much money is $100 a week? ›

$100 weekly is how much per month? If you make $100 per week, your Monthly salary would be $433.

How to get monthly dividend income? ›

They pay out all year, making them attractive to those who want regular cash. These companies offer monthly dividends and might often include real estate investment trusts (REITs), business development companies (BDCs) and some dividend-focused mutual or exchange-traded funds (ETFs). These stocks offer a steady income.

How to increase dividend income? ›

They might gravitate toward stocks with high dividend yields, or they might take the approach of holding stocks of companies that seem likely to continue growing their payouts at a good clip. But there is another way to increase income from stock (or stock-fund) investments: writing covered call options.

How much money do I need to invest to make $4000 a month? ›

Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.

How much to invest to get $4,000 a month in dividends? ›

Too many people are paid a lot of money to tell investors that yields like that are impossible. But the truth is you can get a 9.5% yield today--and even more. But even at 9.5%, we're talking about a middle-class income of $4,000 per month on an investment of just a touch over $500K.

How much can you make in dividends with $1 million dollars? ›

Stocks in the S&P 500 index currently yield about 1.5% on aggregate. That means, if you have $1 million invested in a mutual fund or exchange-traded fund that tracks the index, you could expect annual dividend income of about $15,000.

How much money do I need to make 50000 a year in dividends? ›

Let's also be realistic here, $50,000 per year in passive income from dividends requires a substantial portfolio. at an average 5% yield an investor will need $1 million in dividend bearing stocks to create $50K in income yearly.

References

Top Articles
Latest Posts
Article information

Author: Twana Towne Ret

Last Updated:

Views: 6415

Rating: 4.3 / 5 (64 voted)

Reviews: 95% of readers found this page helpful

Author information

Name: Twana Towne Ret

Birthday: 1994-03-19

Address: Apt. 990 97439 Corwin Motorway, Port Eliseoburgh, NM 99144-2618

Phone: +5958753152963

Job: National Specialist

Hobby: Kayaking, Photography, Skydiving, Embroidery, Leather crafting, Orienteering, Cooking

Introduction: My name is Twana Towne Ret, I am a famous, talented, joyous, perfect, powerful, inquisitive, lovely person who loves writing and wants to share my knowledge and understanding with you.