You don’t need to be rich to start earning income from your investments — you just need a plan.
In the last post, we talked about how income investing can give you more freedom, flexibility, and even the power to step away from your 9-to-5 job. But maybe you’re wondering:
“How do I actually start?”
Let’s break it down: here’s how you can build your first $100/month in income from investments — without needing six figures in the bank.
Step 1: Pick Your Passive Income Strategy
There are lots of ways to generate passive income, but if you want predictable monthly income, these are the most beginner-friendly:
-
Dividend Stocks – Companies that share profits with investors (often quarterly)
-
REITs (Real Estate Investment Trusts) – Real estate companies that pay high dividends
-
Bond ETFs – Funds that pay regular interest, with lower risk
-
Covered Call ETFs – Diversified exposure, weekly to monthly income
For this guide, we’ll focus on dividend stocks and REITs, as they have the most history. Covered Call ETFs will be covered later as they offer a more modern look at income investing.
Step 2: Know the Math — How Much Do You Need?
To earn $100/month ($1,200/year), you need to invest in assets that pay you consistently. Here's the basic math:
| Yield | Investment Needed for $100/Month |
|---|---|
| 3% | $40,000 |
| 5% | $24,000 |
| 7% | $17,100 |
| 10% | $12,000 |
Yield = annual income ÷ investment amount
Example: $1,200/year ÷ $24,000 = 5% yield
Start with what you can. Even $1,000 invested at 5% yields $50/year. That’s not life-changing, its habit building.
Step 3: Choose Income-Paying Investments
Here are a few examples to research:
Dividend Stocks
-
Johnson & Johnson (JNJ) – Reliable, slow-growth, 2.5–3% yield
-
Verizon (VZ) – Higher yield (6–7%), but more risk
-
Dividend ETFs:
-
SCHD (Schwab U.S. Dividend Equity ETF) – ~3.5% yield, diversified
-
VYM (Vanguard High Dividend Yield ETF) – ~3% yield
-
REITs
-
Realty Income (O) – Monthly payouts, ~5–6% yield
-
VNQ (Vanguard Real Estate ETF) – Broad exposure to real estate
Bond ETFs (Lower risk)
-
BND (Vanguard Total Bond Market) – ~3–4% yield
-
HYG (High-Yield Corporate Bonds) – ~5–6%, higher risk
Tip: Look for monthly or quarterly payouts, check dividend history, and consider diversification across sectors.
Covered Call ETFs
- SPYI (~12.5%) - S&P 500 index!
QQQI (~14.5%) - Nasdaq Index!
MAGY (~34%) - Magnificent 7 Index!
Tip: Look for monthly or quarterly payouts, check dividend history, and consider diversification across sectors.
Step 4: Reinvest Until It Grows
When you’re just starting, $10/month in dividends might not feel exciting — but reinvesting is where the real growth happens. Over time, your dividends buy more shares, which generate more dividends, and the cycle builds.
If you're starting with a small amount:
-
Use DRIP (Dividend Reinvestment Plans) if available
-
Set auto-investments through a brokerage like Fidelity, Schwab, or M1 Finance
-
Make consistent contributions (even $100/month helps)
Step 5: Track Your Progress
A few tools to help:
-
TrackYourDividends.com – Free tool to track dividend income
-
Personal Capital (Empower) – Budget + investment tracker
-
Spreadsheet – Make your own and track income by month
Celebrate your milestones:
-
First $10
-
First $100
-
First $100/month
-
First $1,000/month... it’s coming.
Final Thoughts: Your First $100 is Just the Beginning
Once you earn $100/month passively, your mindset shifts. You start seeing money not just as something you earn, but something you can build. That first $100 proves it’s possible. The next $100 comes faster.
You’re not just investing. You’re buying time, freedom, and choices.
Want Help Getting Started?
Sign up and Subscribe to start a discussion about your goals and ways to achieve them!
Disclaimer: The information provided in this content is for entertainment purposes only and should not be considered financial, investment, or trading advice. I am not a licensed financial advisor. All investing involves risk, May include by not limited to loss of principal. Always do your own research or consult with a qualified financial professional before making any financial decisions.
No comments:
Post a Comment