A $1.06M portfolio yielding 2.7% with 7% annual dividend growth generates $28,600 in income and automatic $2,000 raises yearly.
A $1.06 million portfolio yielding 2.7% with dividends growing 7% annually produces roughly $28,600 in initial income and a $2,000 annual raise. The strategy relies on dividend growth stocks like Procter & Gamble (PG) and Coca-Cola (KO), which require similar capital but offer accelerating payouts over time.
Dividend growth outpaces high-yield instruments long-term. For example, Lowe’s (LOW) dividends quadrupled since 2016 alongside a 223% price gain. A 2.7%-yielding dividend grower surpasses the 4.5% Treasury coupon within seven years, compounding raises on an expanding income base.
Johnson & Johnson (JNJ) recently increased its quarterly dividend by 3% to $1.34 per share, extending its streak of annual raises to 64 years. The move added $0.16 per share in annual income without requiring portfolio adjustments.