Here's Exactly How Much You'd Need to Invest in SCHD to Build $500 Per Month in Passive Dividend Income
There are multiple ways to build toward a $500 monthly income stream from SCHD.
Overview
The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is one of the most popular dividend-focused ETFs. That's because it offers a high current yield (3% over the trailing 12 months) and has a strong historical dividend growth rate (its holdings have grown their dividends at a more than 9% compound annual rate over the past five years). Thanks to its current high yield, you'd only need to invest $200,000 to generate $6,000 in annual dividend income ($1,500 quarterly, which is $500 per month). That's a third of what you'd need to invest in an S&P 500 index fund to generate the same amount of annual dividend income, given its lower yield (1%).
You can also build toward $500 a month in passive dividend income with the Schwab U.S. Dividend Equity ETF. Here's exactly how much you'd need to invest each month to reach your income target by the time you need it.
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Originally published at www.fool.com.