How to Make $5,000 in Passive Income and Get Free Stock
Updated: Aug 28, 2019
How to invest in monthly dividend stocks to create $5,000 in passive income. Create a portfolio using Robin Hood and WeBull for free stocks and free trade commissions.
As we develop a Passive Income Monthly Plan, the end game is to have enough income to achieve financial independence. The most important stage of the process is investing your money to crate monthly income. We have a list of high yield monthly income stocks to use for this purpose. We will start this stage by opening up stock accounts to hold your investments.
By age 50, retirement-plan provider Fidelity recommends having at least six times your salary in savings in order to retire comfortably at age 67. By age 55, it recommends having seven times your salary. Most 50-something Americans aren’t on track: As of the first quarter of 2019, those between 50 and 59 years old with a 401(k) had an average balance of $174,100 and were contributing 10.1% of their paychecks.
A new report from Charles Schwab indicates you need to have a net worth of at least $2.27 million to be considered wealthy in the U.S. A survey of 1,000 Americans spanning several generations – Baby Boomers, Gen X, Millennials, and Gen Z – suggested that the "rich" bar goes up as one gets older, according to Bloomberg. There are nuances to this debate, though. To be considered "financially comfortable," the average amount respondents said you'd need is just $1.1 million, Bloomberg reports.
What should a person do today to prepare for a lively retirement? What if you fall outside the metrics listed here?
I am here to tell you there is always hope to improve your financial and personal well-being. It is not about where you start but where you end that is the most important aspect for success. This monthly income plan can fix this issue so everyone can have an enjoyable retirement on their personal terms.
I have already create a monthly income plan where a person can retire comfortably without having millions in the bank. We have a simple system to invest in monthly dividend stocks. This creates several monthly checks without having to worry about the stock market or running out of money. I even include a starter list of monthly dividend stocks and a comprehensive list for future investments.
If you get started early, then you can retire early on your terms. Yes, there is a plan to reach financial independence by replacing employment income with gifted income from dividends.
I have laid out the details of the plan in an easy to understand format and language void on industry jargon. There is no fluff to beef up the content in the writing. I want to get straight to the point with hard-hitting information. You can read this in a single sitting and re-read as much as you like as you create your monthly income plan.
You will be successful and happier creating your own monthly income plan. Now, start thinking of your goal for financial independence – how much income per month and when to declare yourself self-sufficient on your journey to retirement.
Let’s get started.
As mentioned, I have a list of around 400 stocks that pay monthly dividends. You will want to allocate your dollars across 30-60 of these investments. This will spread any risk across a diverse group of stocks, ETFs, CEFs, ETNs, and investments. And, how does 30 to 60 paychecks per month sound?
We will start with a list of 5 stocks that have a dividend yield more than 20%. This means you will make $200 per year on every $1,000 invested. When your account reaches $10,000 (from your earned income invested), you will make $2,000 in passive income. Now, you can see how this has unlimited potential as you grow your account size.
Before we get to the stocks, here are some guidelines for your investing. Your objective is receiving the monthly dividend. This means you should not worry about the changing stock price or the media accounts of a recession or whatever is the news of the day. You don’t need to watch the market each day like a day trader. You should invest in small amounts over a period of time to dollar-cost average into the stocks. Lastly, it is fine to start with a small account such as a few hundred dollars and continue to add to it over time. Some may add $25 per week or their monthly income from other passive streams. Coupled with the monthly dividends, your account will grow higher in a short time.
Here is a list of ETNs for your consideration (this is not financial advice as I am not a registered financial agent):
Credit Suisse X-Links Monthly Pay 2xLeveraged Mortgage REIT ETN – (REML) has a dividend yield of 23.7% and currently trading at $21.50. The Fund seeks to linked to the monthly compounded leveraged performance of the price return version of the FTSE NAREIT All Mortgage Capped Index. It measures the performance of tax-qualified US Mortgage REITs with more than 50% of total assets invested in mortgage loans or mortgage-backed securities.
ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN – (SMHD) has a dividend yield of 23.6% and currently trading at $10.70. The Fund seeks to provide a monthly compounded two times leveraged long exposure to the performance of the small cap Index.
ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN Series B – (MRRL) has a dividend yield of 23.4% and currently trading at $12.25. The Fund seeks monthly compounded two times leveraged long exposure to the performance of the Index. The return on the Securities will be linked to the performance of the relevant Index, which will be identified in the applicable pricing supplement.
Cornerstone Strategic Value Fund Inc. – (CLM) has a dividend yield of 21.8% and currently trading at $11.25. The fund invests in public equity markets across the globe. It seeks to invest in stocks of companies operating across diversified sectors. The fund primarily invests in value and growth stocks of companies.
ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN – (CEFL) has a dividend yield of 17.4% and currently trading at $11.75. The note seeks to track twice the monthly performance of the ISE High Income Index. The index represents the public equity markets of the United States.
You should evaluate each of these stocks for the risk of investments and your investing style. I personally own each of these in my portfolio but you should make your own decision. I will be sharing more high yield monthly dividend stocks in future posts.
In case you don’t already have a brokerage account, I have listed three sources below. I actually have accounts at these brokerages for my monthly dividend stocks. I like both Robin Hood and WeBull as they have low account setups ($5 to open) with no commissions for buying stock. If you want to have a portfolio of 30 or more stocks, the no commissions is a great bonus. I like to roll my passive income into these accounts to invest in my monthly dividend stocks for a lifetime living on the Passive Income Monthly Plan.
Plus, you get a FREE stock when you open an account.
Robin Hood – Open an account for $5 to get a free stock. Then, refer friends so you each get a free stock. Invest in stocks, ETFs, options, and cryptocurrencies, all commission-free, right from your phone or desktop.
WeBull - Free shares are valued anywhere between $8 and $1,000, depending on market activity. This is an app-based brokerage on your phone. You can refer friends for additional stock.
Once you build a sizable portfolio, you can transition to standard brokerages like E-Trade, T – this is my three suggestion as I have this for dividend stocks too. This is your standard brokerage account which may come into play as your earnings reach a higher level.