How To Earn $100 A Month In Dividends

How To Earn $100 A Month In Dividends — 6 easy steps to make $100 per month in passive dividend income from a small stock portfolio. I am not a licensed investment advisor and this article is not investment advice.

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I recently made over $100 per month in dividends for the first time.

It happened in September 2021 to be more exact, and I made over $115 in dividends in December 2021. 

Considering that I just recently hit this mark, I am in the perfect position to show you how to earn $100 a month in dividends. 

If you would like to learn how to earn $100 a month in dividends, continue reading to find out how much you will need to invest and how to make it happen.

Check out my recent dividend income updates where I made over $100 per month:

Dividend Income September 2021 — $100.61

Dividend Income December 2021 — $115.72

How To Earn $100 A Month In Dividends In 6 Steps

I will start with an overview of the 6 steps and then dive into each point in more detail.

Here are 6 steps to make $100 per month from dividend investing:

1. Open a brokerage account
2. Figure out how much to invest
3. Save money or start contributing regularly
4. Decide on which stocks to buy
5. Buy stocks
6. Collect $100 per month in dividends

Let’s look at each step in more detail.

How To Earn $100 A Month In Dividends In 6 Steps

1. Open A Brokerage Account

Before you can invest or receive dividends, you will need to have access to a brokerage account.

The brokerage account will allow you to buy stocks and it’s also where your dividends will be paid.

So if you don’t already have a brokerage account, start doing some research and open an account.

If you live in Canada, Wealthsimple offers commission-free trading. Another affordable brokerage to consider is Questrade. 

If you already have a brokerage account, you can skip this step.

2. Figure Out How Much To Invest

After you open a brokerage account, the next step to receiving dividends is figuring out how much you will need to invest.

In short, the amount you will need to invest will depend on the dividend yield of the stocks you invest in.

Let’s use a dividend stock like Enbridge (Ticker: ENB) as an example. Enbridge is a high-yielding dividend stock that offers a 6.28% yield. This means you will need to invest less than you would with a lower-yielding stock in order to earn $100 a month.

Personally, I own 78 shares of Enbridge. Each share of Enbridge pays $3.44 annually or $0.86 quarterly. So the 78 shares I own pay $68.07 four times per year. 

Since earning $100 per month adds up to $1,200 annually, I would need to own 349 shares of Enbridge to earn $1,200 per year. (1,200/3.44 = 349 rounded up).

349 shares of Enbridge would pay $1,200.56 annually. 

As of March 2, 2022, Enbridge shares are trading at just over $56 per share. So to acquire 349 shares of Enbridge, you would need to invest approximately $19,600. 

Of course, you probably don’t want to put all your money in one stock, and most dividend yields are not as high as what Enbridge offers. 

If you are investing in a stock with a 3% dividend yield, the amount you need to invest doubles. 3% of $40,000 is $1,200. In other words, you need to invest $40,000 to earn $100 a month in dividends at a 3% dividend yield.

3. Save Money Or Start Regularly Contributing

Now that you have an approximate idea of how much you need to invest, you can either move that much money into your brokerage account or start saving up.

For most people starting out, you probably have to begin saving up and regularly contributing.

That’s how I had to do it.

I recommend paying yourself first or setting up an automatic contribution.

4. Decide On Which Dividend Stocks To Buy

Once you have enough money saved up to invest in stocks, it’s time to decide on which stocks to buy.

For the record, you don’t have to wait until you have $20,000 to $40,000 saved up to begin investing. 

You can start investing as soon as you have enough to buy a single share of a stock. 

Personally, I like the idea of dollar cost averaging into stocks. This way, you can start growing your dividend income right away and have dividends to reinvest. 

In turn, you will be able to reach $100 per month in dividends faster than if you had to save it all up yourself. 

Also worth noting, dividends are not the only thing to consider when deciding on which stocks to buy. 

In addition to the dividends, focus on the quality of the business, the valuation, and the management.

Related: How To Find Which Stocks To Buy

5. Buy Stocks

After you have decided which stocks to buy and saved up the cash, it’s time to start investing.

There’s not really much I can add here.

Just remember to pay attention to the price you pay for stocks, and continue to invest regularly to grow your dividend income.

6. Collect $100 A Month In Dividends

Once you have invested enough money, you will begin to see dividend income trickle in.

Unless you set up DRIP (dividend reinvestment plan), the dividends will be deposited directly back into your brokerage account. 

Of course, you might be tempted to spend your dividend income. But if you view it as additional savings, you can reinvest it to grow your dividend income beyond $100 per month.

Technically, you can grow your dividend income every single month from this point, even if you stop saving.

How To Earn $100 A Month In Dividends — Final Thoughts

By this point, hopefully you understand how to earn $100 a month in dividends.

Overall, the process to earn $100 per month in dividends is really quite simple.

It takes time and effort in the beginning to save money. But once you get the ball rolling, you can continue to reinvest and earn more dividend income every single month.

Similar Articles On Dividend Investing To Check Out

How To Dollar Cost Average — 7 Tips To Turn Investing Into A Habit

How Do You Know How Often A Stock Pays Dividends?

Dividend Investing Tips — 9 Must-Know Tips For Dividend Investors

How Much Much Do I Need To Invest To Make $3,000 A Month?

Dividend Income September 2021 — $100.61

Dividend Income December 2021 — $115.72

How To Make $1,000 A Month In Dividends

How Much Do I Need To Make To Live Off Dividends?

I am not a licensed investment or tax adviser. All opinions are my own. This post may contain advertisements by Monumetric. This post may also contain internal links, affiliate links to BizBudding, Amazon, Bluehost, and Questrade, links to trusted external sites, and links to RTC social media accounts.

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