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2 days ago
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4 Top Dividend ETFs Yielding Over 4% to Buy for Easy Passive Income
The Schwab U.S. Dividend Equity ETF and Pacer Global Cash Cows Dividend ETF have yields above 4%. The JPMorgan Equity Premium Income ETF uses options to generate passive income. The iShares Preferred and Income Securities ETF holds bond-like income securities. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › Exchange-traded funds (ETFs) make investing easy. These managed funds come with built-in diversification. Because of that, you can buy an ETF and sit back and let it do all the work. Many ETFs hold income-generating investments, making them ideal for those seeking passive income. Here are four top dividend ETFs yielding at least 4% to buy and hold for easy passive income. The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) tracks an index (Dow Jones U.S. Dividend 100 Index) focused on companies that pay quality and sustainable dividends. It targets higher-yielding dividend stocks that have grown their payouts at healthy rates over the past five years, which seem likely to continue. The Schwab U.S. Dividend Equity ETF has a distribution yield of slightly more than 4% based on its payments over the last 12 months. Given the fund's emphasis on holding dividend growers, it has delivered a steadily rising income stream to its investors over the years: While that past performance doesn't guarantee future success, the fund's focus on high-quality companies that grow their dividends bodes well for its ability to continue paying a steadily rising income stream. The iShares Preferred and Income Securities ETF (NASDAQ: PFF) tracks an index that holds preferred and hybrid securities. These investments are like a combination of bonds (they pay fixed income) and stocks (they represent an ownership interest). They tend to be riskier than bonds but have a lower risk profile than stocks. The fund currently holds 443 securities, primarily issued by financial institutions (70.2% of its holdings), industrial companies (18.2%), and utilities (10.2%). The ETF has a 6.6% yield based on payments over the last 12 months. That's on par with a high-yield bond fund. In addition to that high yield, which can fluctuate from month to month, the fund offers some potential for price appreciation. For example, a $10,000 investment made at the fund's inception in 2007 would be worth over $20,000 today. The JPMorgan Equity Premium ETF (NYSEMKT: JEPI) aims to distribute income to investors each month while also providing them with less volatile exposure to the equity market. The JPMorgan Equity Premium ETF has a two-fold investment strategy designed to achieve that goal: Defensive equity portfolio: The fund holds a portfolio of stocks selected based on its proprietary, risk-adjusted stock rankings to provide exposure to the market. Discipline options overlay strategy: The ETF's managers write out-of-the-money (above the current level) call options on the S&P 500 Index. By writing (or shorting) these options, it gets paid the options premium (value of the option). The strategy generates income that the fund can distribute to investors each month. The fund's strategy is very lucrative: As that chart shows, it has delivered a higher income yield than U.S. high-yield bonds (junk bonds) over the past 12 months. In addition to that lucrative passive-income stream, the fund can also deliver some price-appreciation potential from its stock portfolio. The Pacer Global Cash Cows Dividend ETF (NYSEMKT: GCOW) focuses on companies that generate lots of free cash flow. That enables these cash cows to pay lucrative dividends. The strategy-driven ETF aims to identify companies that can continue to pay attractive dividends by screening for them based on their free-cash-flow yield and dividend yield. The fund holds the top 100 companies with the highest free-cash-flow yield and highest dividend yield. It weighs them by their dividends, capping the top holding at 2% of the fund's assets. It reconstitutes and rebalances its holdings twice each year to ensure it holds the 100 top cash cow dividend stocks. The average holding in the fund has a 6.3% free-cash-flow yield and a 4.7% dividend yield. However, after expenses (the fund has a 0.6% ETF expense ratio), its annualized dividend yield is closer to 4.2%. While the fund's strategy aims to identify companies in a better position to maintain and grow their dividends, there's no guarantee that will happen, as fund payments can fluctuate, sometimes significantly, based on dividends received by the companies it holds. ETFs make it super easy to generate passive income. Many ETFs focus on holding income-producing investments, giving investors lots of options. The Schwab U.S. Dividend Equity ETF, iShares Preferred and Income Securities ETF, JPMorgan Equity Premium Income ETF, and Pacer Global Cash Cows Dividend ETF stand out for their attractive yields and potential for income growth. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Matt DiLallo has positions in JPMorgan Equity Premium Income ETF and Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 4 Top Dividend ETFs Yielding Over 4% to Buy for Easy Passive Income was originally published by The Motley Fool
Yahoo
2 days ago
- Business
- Yahoo
Better Dividend ETF to Buy Now: Schwab U.S. Dividend Equity ETF or Vanguard Dividend Appreciation ETF?
The Schwab U.S. Dividend Equity ETF has a higher yield and has sharply increased its dividend. However, the Vanguard Dividend Appreciation ETF has produced better total returns for investors. A seeming shift in one ETF's DNA provides clues as to which one may perform better in the years ahead. 10 stocks we like better than Vanguard Dividend Appreciation ETF › Diversification is crucial for dividend investors. You don't want to depend on only a few companies for your dividend income, because it can be painful if something goes wrong. That's where exchange-traded funds (ETFs) can make life much easier. The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) are two popular dividend stock ETFs. Both offer investment exposure to a bucket of blue chip dividend stocks and have gradually paid investors increasingly larger dividends. But which of these ETFs should investors buy right now? This Fool dove deep, and what I found is fascinating. Here is what you need to know. The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, while the Schwab U.S. Dividend Equity ETF follows the Dow Jones U.S. Dividend 100™ Index. Both ETFs deal primarily in large-cap dividend stocks, and the individual companies in these ETFs and their respective weightings change over time. So, to compare these two funds, I looked at which ETF has grown its dividend more over the past 10 years. You would probably guess it was the Vanguard Dividend Appreciation ETF given its name and its focus on dividend growth. What's more, its 1.8% yield is roughly half that of its rival's 4% yield, and generally speaking, faster-growing dividend stocks yield less. Surprisingly, investors have gotten better dividend growth from the Schwab U.S. Dividend Equity ETF. It's hard to keep raising a dividend without sufficient underlying business growth, so given the Schwab ETF's robust dividend growth, you'd probably expect it to have better total investment returns over the past decade. Guess again! The Vanguard Dividend Appreciation ETF is the winner in price appreciation and total returns. It's a bit confusing why this is until you dig deeper. What's going on? Here are the current top holdings for each ETF, along with their recent dividend yields: Company Percentage of ETF Dividend Yield Broadcom 4.20% 1% Microsoft 4.12% 0.7% Apple 3.77% 0.5% Eli Lilly 3.72% 0.8% JPMorgan Chase 3.62% 1.9% Visa 2.98% 0.6% ExxonMobil 2.44% 3.8% Mastercard 2.36% 0.6% Costco Wholesale 2.31% 0.5% Walmart 2.22% 0.9% Source: Chart by author using data from the ETF's prospectus page. Company Percentage of ETF Dividend Yield Coca-Cola 4.34% 2.7% Verizon Communications 4.31% 6.2% Altria Group 4.25% 6.7% Cisco Systems 4.24% 2.5% Lockheed Martin 4.20% 2.7% ConocoPhillips 4.14% 3.6% Home Depot 4.05% 2.5% Texas Instruments 3.94% 3% Chevron 3.84% 4.9% AbbVie 3.69% 3.5% Source: The author created this chart using data from the ETF's prospectus page. A decade ago, the Vanguard Dividend Appreciation ETF yielded approximately 2.1%. Now, it's 1.8%, which makes sense when you look at its top holdings. Outside of ExxonMobil, these companies have strong earnings growth and low dividend yields. Investors generally pay more for growth, which is why the yields would be lower. The Schwab ETF's yield increased from 2.7% to 4% over 10 years. As shown in the second list, nearly every top holding yields 2.7% or higher today. These stocks mostly feature lower growth and higher dividend yields. Over time, the Schwab U.S. Dividend Equity ETF seems to have shifted to slower-growing, higher-yielding dividend stocks. This helps explain how an ETF's yield and dividend amount could increase, as Schwab's did, without the accompanying growth and price appreciation. Understanding this divergence in the two ETFs should help you determine the better investment for your portfolio. If maximizing your immediate income is your primary goal, it's hard to go wrong with the Schwab U.S. Dividend Equity ETF and its 4% yield. You'll still get a little bit of price appreciation, too. However, I wouldn't anticipate another decade of such strong dividend growth. The ETF's holdings seem to have a lower growth baseline now. The Vanguard Dividend Appreciation ETF's current composition is clearly more growth-oriented. Therefore, investors should expect it to grow the dividend faster and generate better total returns over the long term. So, for most investors who aren't retirees, the Vanguard Dividend Appreciation ETF is the better buy today. Before you buy stock in Vanguard Dividend Appreciation ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard Dividend Appreciation ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 JPMorgan Chase is an advertising partner of Motley Fool Money. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Apple, Chevron, Cisco Systems, Costco Wholesale, Home Depot, JPMorgan Chase, Mastercard, Microsoft, Texas Instruments, Vanguard Dividend Appreciation ETF, Visa, and Walmart. The Motley Fool recommends Broadcom, Lockheed Martin, and Verizon Communications and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Better Dividend ETF to Buy Now: Schwab U.S. Dividend Equity ETF or Vanguard Dividend Appreciation ETF? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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3 days ago
- Business
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Should Vanguard High Dividend Yield ETF (VYM) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Vanguard High Dividend Yield ETF (VYM) is a passively managed exchange traded fund launched on 11/10/2006. The fund is sponsored by Vanguard. It has amassed assets over $59.05 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market. Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies. While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets. Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same. Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space. It has a 12-month trailing dividend yield of 2.85%. It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis. This ETF has heaviest allocation to the Financials sector--about 21.50% of the portfolio. Information Technology and Consumer Staples round out the top three. Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 4.78% of total assets, followed by Jpmorgan Chase & Co (JPM) and Exxon Mobil Corp (XOM). VYM seeks to match the performance of the FTSE High Dividend Yield Index before fees and expenses. The FTSE High Dividend Yield Index which is consists of common stocks of companies that pay dividends that generally are higher than average. The ETF has gained about 2.09% so far this year and was up about 10.92% in the last one year (as of 06/03/2025). In the past 52-week period, it has traded between $114.78 and $135.06. The ETF has a beta of 0.78 and standard deviation of 14.69% for the trailing three-year period, making it a medium risk choice in the space. With about 593 holdings, it effectively diversifies company-specific risk. Vanguard High Dividend Yield ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VYM is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well. The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $68.10 billion in assets, Vanguard Value ETF has $133.44 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%. An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard High Dividend Yield ETF (VYM): ETF Research Reports JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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4 days ago
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This ETF Could Turn $500 Per Month Into a $851,000 Portfolio Paying $30,000 in Annual Dividend Income
This ETF invests in high-quality dividend stocks. It currently offers a high yield, despite a 12.2% annualized return since 2011. It's one of the simplest and most effective ways to build a portfolio of high-quality dividend payers. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › Many investors aspire to build a portfolio that can pay them enough in dividends to fund their retirement goals. If you can find stocks that consistently raise their dividends, typically offsetting the impact of inflation and then some, you could find yourself in the enviable position where you can leave your principal investment untouched. Instead, you get to live off your dividends and pass along your stocks to your heirs or donate them to charity. But building a portfolio of high-quality dividend stocks isn't easy. Fortunately, there's one exchange-traded fund (ETF) that can take care of it for you. And if you invest early and consistently until retirement, you could end up with a portfolio worth over $850,000 that pays out around $30,000 in annual dividends. Two simple factors that can help investors find companies that are likely to raise their dividends in the future are management's history of dividend increases and the company's financial health. If management has consistently increased the dividend and has the financial ability to keep doing so, it's very likely to continue the streak. That's why the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is an effective way to invest in high-yield dividend growth stocks. The index fund follows the Dow Jones U.S. Dividend 100 Index, which selects 100 stocks that have each increased their dividend annually for at least 10 consecutive years. It ranks each eligible company by several criteria: the ratio of free cash flow to debt, return on equity, dividend yield, and dividend growth rate. The top 100 companies (based on a composite ranking of all four criteria) are included in the index and weighted by market cap. As of this writing, the 10 largest companies (and their dividend yields) in the index are as follows: Coca-Cola (2.8%) Verizon Communications (6.2%) Altria (6.8%) Cisco Systems (2.6%) Lockheed Martin (2.8%) ConocoPhillips (3.7%) Home Depot (2.5%) Chevron (5.1%) Texas Instruments (3%) Abbvie (3.6%) As you can see, you get a mix of high-yield dividend stocks along with stocks that have strong growth supporting future payout increases. The result is a combined yield of about 4% based on trailing-12-month distributions from the ETF. But the forward yield should be even higher considering most constituents will pay out more over the next year than the previous year. With an expense ratio of just 0.06%, the cost of investing in this ETF is low and in line with some of the most popular index funds on the market. The Dow Jones dividend index's decision to weight constituents by market cap (with a 4% weight limit) makes it a very efficient index to track, and it lowers the risk tied to any high-yield stocks that aren't as fundamentally sound as the screener suggests. If the market bids down the value of those stocks, they will comprise a lower percentage of the index over time, while the high-quality businesses rise to the top. Consistently investing $500 per month into the Schwab U.S. Dividend Equity ETF will eventually produce a sizable portfolio. Automatically reinvesting the quarterly distribution from the ETF will ensure a good total return on your investments as you accumulate shares over time. Since its inception in 2011, the fund has produced an annualized total return of 12.2%. That's an exceptional performance, but it's also worth pointing out the S&P 500 index has beaten the ETF with an annualized total return of 14.5%. The gap between the two has widened recently due to the outperformance of growth stocks since 2023. Historically, the S&P 500 averages returns around 10% per year, and 9% is more appropriate as a conservative estimate of the ETF's annual total return. The ETF's 4% distribution yield is also relatively high, but it may come down over time as the Federal Reserve lowers interest rates. That said, there's no telling what prevailing interest rates will be well into the future. A 3.5% yield is a reasonable estimate for the ETF's future yield. With those assumptions in mind, here's how a $500 monthly investment in the Schwab U.S. Dividend Equity ETF could grow over time if you automatically reinvest dividends. Years Investing Portfolio Value Forward Dividend Payment 1 $6,245 $219 5 $37,368 $1,308 10 $94,862 $3,320 15 $183,323 $6,416 20 $319,431 $11,180 25 $528,851 $18,510 30 $851,070 $29,787 Calculations by author. There are a few important caveats to the above scenario. First of all, it's based on forecasts for expected returns and dividend yields that could be well off the mark. More importantly, those returns won't be linear over time. The market is full of ups and downs. The sequence and size of those ups and downs could have a tremendous impact on the final result of your investments. That said, the longer your holding period, the more likely your results will look like the table above. Another important consideration is the impact of inflation: $30,000 won't have the same buying power in 30 years as it has today. That means investors will have to adjust their expectations or strategy if they want future purchasing power equivalent to $30,000 today. That could mean consistently increasing the monthly contribution, for example. While your actual results may vary from the above table, the key takeaway for most investors is to get started and remain consistent. The Schwab U.S. Dividend Equity ETF is a great option if you seek dividend growth and income in retirement. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Chevron, Cisco Systems, Home Depot, and Texas Instruments. The Motley Fool recommends Lockheed Martin and Verizon Communications. The Motley Fool has a disclosure policy. This ETF Could Turn $500 Per Month Into a $851,000 Portfolio Paying $30,000 in Annual Dividend Income was originally published by The Motley Fool
Yahoo
4 days ago
- Business
- Yahoo
This ETF Could Turn $500 Per Month Into a $851,000 Portfolio Paying $30,000 in Annual Dividend Income
This ETF invests in high-quality dividend stocks. It currently offers a high yield, despite a 12.2% annualized return since 2011. It's one of the simplest and most effective ways to build a portfolio of high-quality dividend payers. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › Many investors aspire to build a portfolio that can pay them enough in dividends to fund their retirement goals. If you can find stocks that consistently raise their dividends, typically offsetting the impact of inflation and then some, you could find yourself in the enviable position where you can leave your principal investment untouched. Instead, you get to live off your dividends and pass along your stocks to your heirs or donate them to charity. But building a portfolio of high-quality dividend stocks isn't easy. Fortunately, there's one exchange-traded fund (ETF) that can take care of it for you. And if you invest early and consistently until retirement, you could end up with a portfolio worth over $850,000 that pays out around $30,000 in annual dividends. Two simple factors that can help investors find companies that are likely to raise their dividends in the future are management's history of dividend increases and the company's financial health. If management has consistently increased the dividend and has the financial ability to keep doing so, it's very likely to continue the streak. That's why the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is an effective way to invest in high-yield dividend growth stocks. The index fund follows the Dow Jones U.S. Dividend 100 Index, which selects 100 stocks that have each increased their dividend annually for at least 10 consecutive years. It ranks each eligible company by several criteria: the ratio of free cash flow to debt, return on equity, dividend yield, and dividend growth rate. The top 100 companies (based on a composite ranking of all four criteria) are included in the index and weighted by market cap. As of this writing, the 10 largest companies (and their dividend yields) in the index are as follows: Coca-Cola (2.8%) Verizon Communications (6.2%) Altria (6.8%) Cisco Systems (2.6%) Lockheed Martin (2.8%) ConocoPhillips (3.7%) Home Depot (2.5%) Chevron (5.1%) Texas Instruments (3%) Abbvie (3.6%) As you can see, you get a mix of high-yield dividend stocks along with stocks that have strong growth supporting future payout increases. The result is a combined yield of about 4% based on trailing-12-month distributions from the ETF. But the forward yield should be even higher considering most constituents will pay out more over the next year than the previous year. With an expense ratio of just 0.06%, the cost of investing in this ETF is low and in line with some of the most popular index funds on the market. The Dow Jones dividend index's decision to weight constituents by market cap (with a 4% weight limit) makes it a very efficient index to track, and it lowers the risk tied to any high-yield stocks that aren't as fundamentally sound as the screener suggests. If the market bids down the value of those stocks, they will comprise a lower percentage of the index over time, while the high-quality businesses rise to the top. Consistently investing $500 per month into the Schwab U.S. Dividend Equity ETF will eventually produce a sizable portfolio. Automatically reinvesting the quarterly distribution from the ETF will ensure a good total return on your investments as you accumulate shares over time. Since its inception in 2011, the fund has produced an annualized total return of 12.2%. That's an exceptional performance, but it's also worth pointing out the S&P 500 index has beaten the ETF with an annualized total return of 14.5%. The gap between the two has widened recently due to the outperformance of growth stocks since 2023. Historically, the S&P 500 averages returns around 10% per year, and 9% is more appropriate as a conservative estimate of the ETF's annual total return. The ETF's 4% distribution yield is also relatively high, but it may come down over time as the Federal Reserve lowers interest rates. That said, there's no telling what prevailing interest rates will be well into the future. A 3.5% yield is a reasonable estimate for the ETF's future yield. With those assumptions in mind, here's how a $500 monthly investment in the Schwab U.S. Dividend Equity ETF could grow over time if you automatically reinvest dividends. Years Investing Portfolio Value Forward Dividend Payment 1 $6,245 $219 5 $37,368 $1,308 10 $94,862 $3,320 15 $183,323 $6,416 20 $319,431 $11,180 25 $528,851 $18,510 30 $851,070 $29,787 Calculations by author. There are a few important caveats to the above scenario. First of all, it's based on forecasts for expected returns and dividend yields that could be well off the mark. More importantly, those returns won't be linear over time. The market is full of ups and downs. The sequence and size of those ups and downs could have a tremendous impact on the final result of your investments. That said, the longer your holding period, the more likely your results will look like the table above. Another important consideration is the impact of inflation: $30,000 won't have the same buying power in 30 years as it has today. That means investors will have to adjust their expectations or strategy if they want future purchasing power equivalent to $30,000 today. That could mean consistently increasing the monthly contribution, for example. While your actual results may vary from the above table, the key takeaway for most investors is to get started and remain consistent. The Schwab U.S. Dividend Equity ETF is a great option if you seek dividend growth and income in retirement. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Chevron, Cisco Systems, Home Depot, and Texas Instruments. The Motley Fool recommends Lockheed Martin and Verizon Communications. The Motley Fool has a disclosure policy. This ETF Could Turn $500 Per Month Into a $851,000 Portfolio Paying $30,000 in Annual Dividend Income was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
