2Lun·

MY PLAN TO LIVE OF DIVIDENDS

Hello everyone, I'm 24 y.o. my investments are currently worth 50 k eur. My plan is to save around 1000 eur per month and invest in growth product for 15 years.

Specifically:

35 % MSCI WORLD INFORMATION TECHNOLOGY $XDWT (+1,25 %)

35 % MSCI WORLD MOMENTUM $XDEM (+0,78 %)

15 % MSCI WORLD SMALL CAP $WSML (+0,43 %)

15 % MSCI WORLD VALUE $XDEV (+1,07 %)

note: they all have had better return (on long range) in comparision with sp500 and ofc msci core world or ftse all word. Plus these etf offer a real diversification from having the big 7 as first positions (not world tech obviusly).

Once I'll reach around 600 k I'II allocate everything in etf high dividend stocks:

Main idea:

100 % core $ISPA (+0,65 %) (good annual dividends around 4.50 % + good growth around 5.40 % yearly, no yield trap, and GREAT global and sectorial diversification)

Second idea (great especially if you don’t have double tax to pay)

70 % core $ISPA (+0,65 %)

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 huge, maybe on avarege around 7 % annualy. Stocks I’m talking about: $ARCC (+0,29 %)
$O (-0,1 %)
$MAIN (+0,19 %)
$PPL (-1,08 %)
$WPC (-0,55 %)
$OHI (+0,17 %)

Note: if you have double tax problem, instead of all these single stocks I would add just $WINC (+0,33 %) in the portafolio.

Since I live in center-south Italian countryside, no rent/mortage needed, for what are my life costs, having a total of about 600 k invested in $ISPA (+0,65 %) to have 1.7 k per month (after italian taxes of 26 % over capital gains/dividend) it’s not bad at all . And that’s enought since my capital will keep on growing (composite growth) over the time togheter with the dividends.

do you have any comments or advice ?

24 Comentarios

MarTheRadi@marda304

2Lun

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

2Lun

@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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PODS@Qubbo

1Lun

You have to consider also the double taxation on dividends (15% from Netherland and 26% from Italy, total of 41%).
I'm investing in $TDIV since 2024 and I have a YoC of 2.1%

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Investor D.@passiveincomefuture

@QubboIs TDIV UCITS double taxed? I thought it wouldn’t be double taxed. Also ISPA?

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Raketentoni@Raketentoni

2Lun

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

2Lun

@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

2Lun

@Raketentoni Top KI Kommentar

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Raketentoni@Raketentoni

2Lun

@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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GeldGenie@GeldGenie

2Lun

@Raketentoni mhm

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AI sagt@GoDividend

1Lun

@Raketentoni There's nothing wrong with that 😉
How's your ETF doing right now?

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Raketentoni@Raketentoni

1Lun

@GoDividend I'm working on it—it's not as easy as it is with individual stocks, since it's difficult to take a deep dive into the individual positions. Most of the time, you can only access the top 10 to 20 positions. But I'm working on a solution.

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GeldGenie@GeldGenie

1Lun

@GoDividend

Well… Transparency is important to me. I think there’s nothing more embarrassing than “passing along” AI slop
with an unclear
prompt and missing sources ^^

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Raketentoni@Raketentoni

1Lun

@GeldGenie Well, he does cite his sources, but GQ doesn't back it up any further 🤷 AI is going to change investing—I read a great article about it today. And when I give my prompt telling it to write like a human, you can't tell the difference anymore.
By the way, you want young people to be financially literate, but 78% of people under 25 are asking AI about investment opportunities.
Source: ING Diba survey of customers under 25 😬

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Poor Dad@PoorDad

2Lun

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

2Lun

@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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Kurama@Kurama01

You didn't factor in the double taxation of all those American companies in your calculation—wouldn't it have been better to hold Italian and British high-dividend companies?

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Investor D.@passiveincomefuture

Yeah, you’re right. Actually, on second thought, I’d rather put all my money into ISPA and TDIV ETFs. I get the security of a dividend and stable growth (more than with individual stocks) along with effective diversification. High-dividend Italian stocks can be yield traps, and in any case, it’s generally better not to take risks with individual stocks. With TDIV and ISPA, you get 4–4.5% in annual dividends and 5–7% annual growth… with just 350k after taxes, you’ll receive 1k per month in dividends, and your wealth will grow “safely” without falling victim to yield traps. It’s therefore better to wait a little longer and play it safe rather than rush to start receiving passive income a few years early and then find yourself at the mercy of stocks that could turn out to be yield traps. Thanks for your comment.

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Kurama@Kurama01

@passiveincomefuture Nah, there are some gems in Italy and the U.K. that are anything but “yield traps”; they’re simply cyclical because of the sectors they’re in. In banking, you have giants like Unicredit and Intesa; in insurance, you have Unipol; in utilities, you have Terna, which is a monopoly; Recordati in pharmaceuticals, Brunello Cucinelli in luxury goods; in the UK, you have Unilever, British American Tobacco, and Legal & General.

If you’re interested in dividends and their growth, you’re on safe ground with these companies. Of course, some are subject to cyclicality, but if allocated with the right weighting, your portfolio becomes efficient. An example might be 70% ETFs, 20% in mature high-dividend stocks (banks/utilities), which give you a starting yield of 5–6%, and 10% in dividend-growth stocks such as luxury goods (Cucinelli) and pharmaceuticals.

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Investor D.@passiveincomefuture

@Kurama01 That's interesting; I'll look into them. Thank you very much.

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Luis B.@Laruibasar

2Lun

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

2Lun

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

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Lum0k@Lum0k

2Lun

Maybe also $CHDVD would fit in the portfolio?

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Xander13@Xander13

1Lun

In the long term (>30 years) you can only expect to safely withdraw 3% of your portfolio annually (this includes dividends and selling principal)

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Guillaume@Guillaume_C

20H

given that in most European countries dividends taxation is higher than capital gain, why not taking accumulating ETF and you sell 2-3% every year. Way more efficient from a tax perspective

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