Thanks to M1 Finance, I am able to try out an experiment of what it would be like to receive "daily dividends."
M1 Finance allows you buy fractional shares as low as 1 cent! Which means you can comprise a massive amount of holdings for a cheap price. This is where my experiment comes in. True to my username, I am a dividend investor. So the thought of daily dividends is music to my ears.
The portfolio comprises of 40 monthly dividend payers. In theory, that means I will be averaging a little over one dividend per day. Of course, the dividend payout days won't lineup perfectly. This means I won't necessarily see a dividend come in every single day, but rather get stacked on a couple days. But, the end result remains 40 dividends in one month!
The initial funding of the portfolio is $350. I opened this project on Tuesday, so the stocks have dipped a little:
The market as a whole has been slightly down this week, so it was not surprising.
If all things remain equal (which they won't), I will receive a yearly yield of 7.5%:
The holdings comprise or REITs, Close-ended funds, Junk Bonds, and ETFs. In my honest opinion, alot of them are pretty bleh stocks, but I wanted to try and maximize the dividends without sacrificing TOO much quality. The $350 investment allowed me to distribute $8.75 per holding. However, I gave some holdings a little higher percentage of the portfolio. Some stocks I own more than one share of, while others I couldn't even afford a half share!
If you're curious, here are all 40 holdings along with the percentage allocations I gave them:
The thing I am most excited about this portfolio, is that it will be COMPLETELY FUNDED by my side hustle. I do amazon mechanical turk on the side. Any earnings I receive from that will go right into the portfolio. The glory of M1 finance is that whenever there is 10 or more dollars in the account, it gets automatically distributed to all holdings in the portfolio based on the percentage allocations. Combine this with the fact that all holdings are monthly payers, this could result in major acceleration of payments which is the whole point of the experiment.
The experiment is essentially seeing if high yielding dividend stocks can keep their value over time without getting too diluted. I hope you join me on this experiment as i will be posting about it almost every weekday!!!
-Scott
Dividend Grinder