How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact

We recommend a portfolio of 15 to 20 positions, about 50% in stocks and 50% in bond CEFs.

It’s a recipe for running out of money, and along the way, there is a drip, drip, drip of financial “blood” too. Remember the annual $40,000 you thought you were banking on your million? As you deplete your million through withdrawals, there is less money to earn dividends for you. The $40,000 slowly declines.

The familiar names can’t recommend our high-income producers to you. Instead, they stick you in pretty much what everyone has. And one more thing. If these are stocks, owning them is not much different than owning a low-cost index fund from Vanguard. The same stocks dominate the same market indexes Vanguard uses! If you own a handful of the big nam

Two simple yet important things set Main Street apart: 1.The firm increases its investment income annually, and 2.It pays a conservative dividend so that it never has to cut it. Since its IPO in 2007, Main Street has boosted its dividend (which is paid monthly) a lovely 77%. It’s never been cut. The company smartly keeps a buffer and pays out extra

The secret is to buy bonds the big money isn’t allowed to. To illustrate the point further, let’s look at the BlackRock Floating Rate Income Strategies Fund (FRA), which buys floating-rate debt. (More about floating-rate debt in a moment). For now, just know that most of the bonds it buys are issued by corporations, and most of them are below the “

One of our favorite CEF managers is Scott Page. He’s been with Eaton Vance, one of the oldest investment management firms in the US, since 1989. He has conducted the Eaton Vance Floating-Rate Income Trust (EFT, not to be confused with ETF, an exchange-traded fund) brilliantly since inception—through rising and falling rate cycles, through rising an

The preferred ETFs, Invesco Preferred and iShares US Preferred, yield 5.8% and 6.1%, respectively, and trade roughly at their “par” value, which means we’re paying $1 for $1 in preferred shares. Meanwhile, Nuveen Preferred & Income Securities Fund (JPS), a CEF, yields more (7.5%) and trades for just 96 cents on the dollar! Plus, it has the bene

And today, DoubleLine Income Solutions is still offering a 9.7% yield net of fees. That’s an unbelievable payout in today’s world.

The firm’s source of extra profits, as discussed earlier, was its investment in MSRs (mortgage service rights). They tend to rise in value when mortgage refinancing slows down, and “refi” activity has slowed significantly in recent years. As long as this environment continues, New Residential will be the mREIT to own. At the time of this writing, o