23H·

How much money is it required to live off dividends ?

Let’s consider this portafolio:

70 % core $TDIV (+0.56%)
$ISPA (+0.68%) (good annual dividends around 4.50 % + great growth around 8 %, no yield trap, and great global and sectorial diversification)

30 % High dividend stocks with the hope that over the time they can growth at least for the purpose of betting inflaction. Their dividend is very different but maybe on avarege we’re around 7 % annualy (with a 6 % growth ? I don’t know very well). Stocks I’m talking about: $ARCC (+2.3%)
$O (+0.18%)
$MAIN (+2.05%)
$PPL (-0.72%)
$WPC (+1.19%)
$OHI (-0.66%) and I would add also $WINC (+0.23%) etf.

Since I live in center-south Italian countryside, no rent/mortage needed. For what’s my lifestyle (very cheap). I think I’d need a total of about 300 k to have 1 k per month (after italian taxes of 26 % over capital gains/dividend) . And that’s more than enought since my capital will keep on growing (composite growth) over the time togheter with the dividends.

do you have any comments or advice ?

11 Comments

Raketentoni@Raketentoni

22H

Great approach! Your allocation perfectly reflects the **barbell strategy** that I also follow. The combination of a strong, defensive 70% pillar ($TDIV / $ISPA) and a 30% high-yield pillar is ideal for weathering turbulent market phases without falling into the infamous “yield trap” (Yield Trap).
A few thoughts on your numbers and values:

* **Stock selection:** With $ARCC, $MAIN, and $O, you’ve chosen absolute quality heavyweights in the BDC and REIT sectors. Not only do they pay dividends reliably, but historically they’ve increased their dividends so significantly that they easily outpace inflation.

* **Your retirement calculation:**

With a 26% tax rate in Italy and a desired net income of €12,000 per year, you’ll need a gross income of around €16,200. With a portfolio of €300,000, this corresponds to a required gross dividend yield of **approximately 5.4%**. This is entirely realistic with your 70/30 allocation and, at the same time, preserves the principal of your portfolio for long-term compound growth.

* **Tip:** For REITs ($O, $WPC, $OHI) and utilities ($PPL), pay attention to how well free cash flow covers debt. As long as operating cash flow comfortably covers distributions, you’re on the right track.
Enjoy the affordable life in the Italian countryside—your strategy is built on an extremely solid foundation!

Great approach! Your setup perfectly mirrors the **barbell strategy** that I also highly value. Balancing a rock-solid 70% core ($TDIV / $ISPA) with a 30% high-yield satellite allocation is a fantastic way to generate reliable cash flow without falling into classic yield traps.
A few thoughts on your math and stock picks:

* **Stock Selection:** Choosing $ARCC, $MAIN, and $O gives you top-tier heavyweights in the BDC and REIT sectors. They don’t just offer high yields; their historical dividend growth easily beats inflation.

* **The Retirement Math:** To receive €12,000 net per year under Italy’s 26% tax rate, you need approximately €16,200 gross. For a €300k portfolio, that requires a gross dividend yield of **around 5.4%**. Your 70/30 split makes this goal highly achievable while keeping the core of your portfolio safe for long-term compound growth.

* **One Piece of Advice:** Keep a close eye on the free cash flow coverage for the REITs ($O, $WPC, $OHI) and utilities ($PPL). As long as their operating cash flow comfortably covers the payouts, you’re in a great position.
Enjoy the affordable, beautiful lifestyle in the Italian countryside—your strategy is built on a very solid foundation!

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Investor D.@passiveincomefuture

17H

@Raketentoni my god I didn't know about this barbell strategy, that's incredible. thank you so much for your comment !!!! have a nice ride with all these dividends

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GeldGenie@GeldGenie

14H

@Raketentoni Top KI Kommentar

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Raketentoni@Raketentoni

@GeldGenie Well, it is to some extent—I work with it, after all 😬—but not everything is AI all the time. 🤷

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MarTheRadi@marda304

20H

Did I miss something? The " $TDIV " is only paying out 3% for me. Especially for strategies like this, getting 1.5% less return really makes a difference.

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Investor D.@passiveincomefuture

17H

@marda304 yeah maybe I over estimated the returns, I'm taking as date the dividends I see on this app. Are there correct or they differ from what you're experiencing by buying for real the asset ?

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Poor Dad@PoorDad

Nobody here can tell you whether it will work or not. The only thing anyone can say is that it is a solid strategy. The rest depends on you and on whether you stay consistent, because following a solid strategy consistently is more important than following the right strategy inconsistently.

In Austria, REITs are classified as non reporting funds, which means there is no double taxation agreement relief on the withholding tax. Check how this is handled in Italy, otherwise you could lose half of your dividend to taxes.

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Investor D.@passiveincomefuture

@PoorDad that’s true if I have reit stocks I pay 15 % american tax + 26 % italian tax over the dividends instead with the etf UCITS like WINC or ISPA or VDIV i don’t have to pay double taxes. Incredible, thank you so much !!!

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Luis B.@Laruibasar

21H

Looks good, also check if bonds would make sense and a secure fix income, maybe not long term but small/medium term. Overall looks good, but being so dependent on dollar dividends could be some what unstable in converting to euro and the fee for that.

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Investor D.@passiveincomefuture

17H

@Laruibasar thank you, I'll take a look on that !!!

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Lum0k@Lum0k

16H

Maybe also $CHDVD would fit in the portfolio?

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