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Millions of young Americans are forging unconventional paths to early retirement amid a growing desire for financial freedom and greater flexibility in spending their time. Data from the Federal Reserve Bank of New York shows that the percentage of people willing to work full-time after age 62 fell to 45.8% in March, compared to 55% in March 2014.
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How are young investors using dividend investing for early retirement? Let’s examine a case study.
Last month, an investor shared his detailed income report with portfolio screenshots on r/dividends, a discussion board for income investors on Reddit with 618,000 members. He said he reached about $61,600 in annual dividend income or $5,130 per month and was “finally able to retire.”
“There will come a day when I can put these distributions to good use. For now, we are just reinvesting,” he added.
The investor’s portfolio showed most of his money was in risky, high-yield YIELDMAX ETFs that generate money by selling call options. Redditors quickly reminded the investor about how risky his investments were and why he could end up in losses during his retirement. However, the investor sounded self-assured, saying he was doing “not too bad right now.”
“Waiting till the end of 2024 to see where it’s at,” he responded to a commenter who warned him that his principal was at risk of going to “zero.”
According to the screenshots shared by the investor, his total portfolio dividend yield was 9.89%. Since his annual dividend income is $61,600, his total portfolio value was roughly over $622,000.
Trending: Over the last five years, the price of gold has increased by approximately 83% — Investors like Bill O’Reilly and Rudy Giuliani are using this platform to create customized gold IRAs to help shield their savings from inflation and economic turbulence.
Let’s take a look at the stocks and funds in the portfolio.
Aberdeen Income Credit Strategies Fund
Shares: 7,364.77
Annual Income: $8,837.73
Aberdeen…
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