A 34-Year-Old Redditor Reveals Three ETFs That Earn Him £32K Annually in Dividends

A 34-year-old Redditor offered a glimpse into his annual income from investments on the r/Dividends subreddit in March. The post revealed that his investments across exchange-traded funds and some top stocks earn him £32,141 ($42,505) annually at a 4.32% yield, implying total investments north of £729,508 ($964,756).

The screen capture of the person's income stats revealed monthly earnings of £2,678 ($3,541) or £88.06 ($116) daily.

Market volatility historically led investors to buy assets like gold and dividend aristocrats for continued income and to limit downsides from selling pressure on the stock market. Industry experts believe the ongoing US tariff-induced market upheaval could be prolonged amid an escalating trade war with China.

S&P Global data revealed that S&P High Yield Dividend Aristocrats outperformed the S&P Composite 1500 during market downturns between 31st December 1999 and 31st March 2022.

The Redditor Nets £8.5K Monthly, Saves Relentlessly

The Redditor with the username r/stfns91 said he nets around £8,500 ($11,241) monthly from salary, dividends, business and capital gains. One of his comments revealed that his net worth is 40% inheritance and 60% savings.

He urged Redditors to save relentlessly because there is a huge difference between saving and investing £856 ($1,133) monthly compared to £2,569 ($3,402). 'Needless to say, you need to be able to have a disposable income of 4-5k to arrange such freedom.' He saves and contributes around £6,865 ($9,078) monthly towards his investments. In the near future, the investor hopes to bump his annual passive income to £42,840 ($56,694).

Although the Redditor believes 'success in investment is mostly no function of work dedicated towards it,' he recommended everyone to keep fixed costs down 'to necessities' and avoid overspending on variables if they want to create passive income streams to cover their monthly budgets.

Overview of His Investment Portfolio

In a different comment, the Redittor shared that he invests in the Global X Nasdaq 100 Covered Call ETF (QYLD) with top holdings, including Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and Broadcom (NASDAQ:AVGO). The ETF implements a covered call options strategy on the Nasdaq 100 Index, which is essentially buying stocks in the index and selling call options on the acquired stocks to generate monthly income from premiums and create wealth from capital appreciation.

His next pick was the Vanguard FTSE All-World High Dividend Yield UCITS ETF (VHYL/VGWD), which focuses on holding companies that pay dividends higher than the average figure. The ETF currently has an annual dividend yield of 3.4% and holds top companies like JPMorgan Chase (NYSE:JPM), Exxon Mobil (NYSE:XOM), Procter & Gamble (NYSE:PG), Johnson & Johnson (NYSE:JNJ), Home Depot (NYSE:HD), Bank of America (NYSE:BAC), Coca-Cola (NYSE:KO), Chevron (NYSE:CVX), among others.

The Redditor also invests in the Vanguard FTSE All-World UCITS ETF (VWRL), which holds assets worth over £12.08 billion ($16 billion) across 3,500 large-cap and mid-cap stocks in developed and emerging markets. Around 66% of total holdings comprise US equities. The ETF has consistently paid dividend income on a quarterly basis since its inception over a decade ago and recorded a dividend yield of 1.23% as of 31st March.

The German-based investors also picked Amundi MSCI World II UCITS ETF Dist (WLD/WLDD), which has 70% of its holdings in US stocks. The ETF focuses on the Magnificent Seven stocks and companies like Berkshire Hathaway. Its current dividend yield is 1.87%.

German telco leader Deutsche Telekom and insurance giant Allianz are also part of the investor's portfolio. He described Telekom as among the 'superb' performers and makes up a 'considerable' part of his portfolio. The telco and the insurer have dividend yields of 2.6% and over 4%, respectively.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.