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How Many Shares of Stock to Make $1,000 a Month? [7 Popular Stocks]

How many shares of stock do you need to buy for monthly income?

How many shares of these stocks would you need to make $1,000 a month income? How do you create cash flow from your investments you can live off each month?

In this video, I’m digging into the numbers to reveal how much you need to invest. We’re going to look at this from different ways and then I’m going to reveal a secret to stock investing most investors don’t think of.

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How to Invest for Monthly Cash Flow

Those of you in the community know, we’re all about dividend investing here on Let’s Talk Money. I love talkin’ other types of investing and making money but there’s just something about that passive income cash flow you get from dividends that’s tough to beat.

In nearly a decade as an equity analyst, I’ve learned there are few things better than a reliable stream of dividends.

But how do you turn a handful of dividend stocks into that cash flow? How do you get to a point you can live off those dividends. How many shares of some of the most popular dividend stocks do you need to make that dream a reality?

That question is straight from the comments to one of our videos here on the channel.

So in this video, we’re going to answer that for seven of the most popular stocks out there. We’ll first look at how many shares and then how much you need to invest in each to reach that thousand-dollar monthly payday.

Finally, I’m going to reveal a truth about dividend investing that most people don’t think about when they’re going after these stocks. I’ll show you exactly how to plan for that payday and how to get there.

Best Stocks for Dividends

For the video, I picked six of the most widely-held dividend stocks and a fund with one of the highest yields you’ll find. We’ll look at the dividend yield on each and then I’ll show you how many shares of stock you need in each and the dollar amount to secure that $1,000 monthly income.

best dividend stocks to buy right now
Best Dividend Stocks to Buy Now

We just posted an analysis of Apple shares on the channel last month with about a $220 price target on top of its 1.5% dividend yield. Apple has a new lineup of iPhones coming out this year and is really building its base for services.

Ford is another stock we’ve recently analyzed and added to our seven-stock passive income portfolio. The shares dropped hard on last quarter’s earnings but that six-and-a-quarter percent dividend is secure and the long-term upside is positive.

Of all the dividend names, I think AT&T is the one I hear most about from you in the community. The company’s made some major acquisitions over the past year so it’s in that growth stage and the 6% dividend is hard to beat.

Realty Income is a solid player in the real estate space and pays a 3.9% dividend yield. Now this one actually pays a monthly dividend rather than every three months like the rest of the stocks in our list. That means you don’t have to time your dividends or save some of that quarterly check, you can just collect it every month.

I just did an analysis of Netflix so I looked into Disney as a competitor and gotta tell you, I really like the growth potential on this one. It’s not a strong dividend name with just a 1.2% yield but we’re going to see in a little bit that the total return has been one of the strongest.

3M is another popular dividend stock I get a lot of requests for and a solid 3.3% yield. 3M is diversified across almost every part of the industrial process so it’s a stable stock that really follows the economy. This company though has one of the best research and development departments I’ve seen and that allows it to get a little extra return on what you’d expect above baseline economic growth.

Our seventh stock isn’t a stock at all but a fund, the Alerian MLP fund, and those of you in the community will recognize this from our 2019 dividend stock portfolio. The fund is an excellent group of pipeline companies in the US energy space, so really primed for that energy independence, and pays a high 8% dividend yield.

How Many Shares to Buy for Monthly Cash

Now let’s look at how many shares you need in each to generate that monthly cash goal but first, I want to send this out to you for a feedback question. Which dividend stocks did I miss, which ones do you want to see highlighted in videos. Scroll down and let me know in the comments below the video.

how many shares of stock to buy for dividends
How Many Shares of Stock to Buy?

So if you look at the dividends per share for each of these companies and that $1,000 monthly goal, you get the number of shares of stock in each you’d need to buy. And we see some hugely varying numbers here, right?

At the top end, you’d need almost 20,000 shares of Ford at that $9.30 each to produce the thousand a month. That’s at a solid 6% dividend yield but just a $0.60 per share annual payout.

You’d need over 15,000 shares of the Alerian fund or 5,800 shares of AT&T stock. On the lower end, you’d need 2,100 shares of 3M at that $177 price and the $5.76 per share in annual dividends.

How Much to Invest for Dividends

But what if we look at it from another perspective. How much do you need to invest in each stock to reach that thousand-dollar monthly goal? After all, you receive that dividend yield on the amount you have invested so it would make sense to look at it this way.

how much to invest in stock for dividends
How Much Should I Invest?

And here we see a completely different story with some of those high-yield stocks on the bottom. We need just over $150,000 in the Alerian MLP fund with its 8% dividend yield. Just $200,000 in shares of AT&T and its 6% yield are enough for a thousand in income each month.

On the other hand, you’d need $810,000 in Apple or almost a million dollars in shares of Disney with their sub-1.5% yield.

But the truth is, neither of these perspectives is the right one.

Trying to get that thousand-dollar income from Apple looks nearly impossible, needing $810,000 invested in the stock. Even some of those high-yield stocks like AT&T, you’d need over $200,000 invested.

But you can’t just look at dividend yield and this is something that a lot of dividend investors get wrong. If you’re living off your investments, so depending on your stocks for a monthly income, then you have to look at the total return in the investment.

shares to buy of dividend stocks
Shares of Dividend Stocks to Buy

When you do this, that amount you need invested changes completely and actually living off your investments becomes a real possibility.

Shares of Disney produced a 12% annual return over the last five years. That’s stock price gain and dividends. At that return, you’d need just $99,800 in the shares, not the million we saw in the graph, to produce that thousand dollars a month.

Better yet, shares of Apple. Remember at that 1.5% dividend yield, we needed $810,000 in the stock for that thousand-dollar dividend? On Apple’s 17.5% annual return over the last five years, you’d need just $68,500 to generate $12,000 a year in profits.

The moral here is you can’t just look at dividends. Learn to look at the total return in shares of stock to see where a company can take you. Reinvest your dividends as long as you can to grow the portfolio so when you need that monthly income, it’s going to be there to support you.

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