 Divenin Investing is an amazing tool for you to generate passive monthly income, which you can either use to build up a bigger portfolio or you just pay your bills. In a world where you can make 10 to 20% in the crypto market, flip an NFT for 50 to 1,000% within a couple of hours, or just simply yolo your entire life savings in an AMC call option, Divenin Investing is not the priority. Not too many people are willing to develop the patience and discipline to build a portfolio big enough that can actually pay for their lifestyle. In a previous video up here, I started a dividend portfolio on M1 Finance because I just wanted to move my dividend paying stocks from Robinhood to another brokerage. I still have money invested in Robinhood. It's mostly a growth portfolio and I use that money and those shares for covered calls and cash secured puts. Since I transferred money from Robinhood into my M1 Finance account, my statistics, unfortunately, aren't correct. My Johnson & Johnson investment, for example, shows a loss of $22, although my cost clearly states $840 and the current value of this position is $896. So even though my portfolio shows a gain of $169, my holdings show the real numbers of a combined unrealized gain of $670, including dividends. Out of the $670, I received $195.93 in dividends alone. For such a small account of not even $20,000, I think that's pretty good. It's far from a life-changing dividend portfolio, but you have to start somewhere. All right, enough of me, let's talk dividends. Before you start your dividend portfolio, make sure you understand your taxes because depending on which tax bracket you're in, you either pay 0, 15, or 20% on every single dividend payment. If your taxable income is between $0 and $40,400, you don't have to pay taxes on any dividends received. If your income is between $40,401 and $445,850, you'll have to pay 15% on your dividend income. And if you make more than $445,851, you'll have to pay 20% on your dividends. I know nobody wants to talk about taxes, but trust me, it's important. Depending on your financial dividend goal, you have to just calculate those taxes in because otherwise it would be a big surprise. $1,000 a month in dividends. Here's a question for you. How much money do you think you'll need invested at 4%? Let's just assume 4% in the stock market to receive $1,000 every month. Is it $100,000? Is it $300,000 or $500,000? Let's find out together. If we assume that the average dividend yield of your entire investment portfolio is 4%, all we have to do is take the $1,000 a month, multiply that by 12. So we have the yearly income. It's $12,000, divide that by 4%. And now we know how much money we need. So all you need is $300,000 invested in the stock market. Nice. Well, nobody said it was easy to get paid $1,000 in passive income for absolutely doing nothing. If you are serious about your financial future and passive income in form of dividends sounds interesting to you, you better start today. And when finance even helps you jumpstart that journey with $30 if you sign up. So $1,000 in dividends a month is very ambitious already. Like $300,000 is a big number. But let's see how much money you actually need for $5,000 in dividends per month. So $5,000 a month in dividends. What do we need? Same math applies here. So we take our monthly goal of $5,000 in dividends, multiply that by 12 equals $60,000. $60,000 is our yearly dividend income. Now we divide that by 4% and boom, this is what we need. You will need $1.5 million invested in the stock market with a dividend yield of 4% to achieve $5,000 each month. So who's going to tell me? Oh, yeah. You in the first row? What about taxes? Exactly. Gold star for you. Thank you for paying attention. If you have $1.5 million invested in the stock market, I assume that you're going to be in the highest tax bracket, which means you have to pay 20% on all dividends received. So instead of $60,000 pre-tax, you get $48,000 post-tax. That equals out to $4,000 post-tax per month. So let's see how much you really need to get post-tax $5,000 each month. Here we go. $60,000 is basically 80% because the 20% goes to taxes. So what we're going to do is $60,000 divide that by 0.8, which brings us to $75,000. Now we do the same math all over again. $75,000 divided by 4% equals $1.875 million invested in the stock market at an average dividend yield of 4% generates $6,250 every month pre-tax. That leaves you with $5,000 post-tax. As you can see, free dividend money, as some people describe it, comes at a cost. You have to actively work on your portfolio and feed it on a regular basis to help it grow. And here it comes. Discipline and patience will actually determine how soon your money tree will bloom. I recently started selling covered calls on my growth portfolio shares again because I believe that September and October both months will be weak for my growth portfolio. That way, even though my growth portfolio decreases in value, I can generate money by selling covered calls, which I can then use to feed my dividend portfolio. Last week, I just made $950 by selling covered calls, which is already on the way into my M1 finance account, which then will be invested as soon as it lands there. And while the entire market is red and everything is down, I can go shopping for my favorite stocks at a discount. If you want to see those trades live, join my Patreon, there's a link in the description below. One more thing, you with the gold star. Yeah, you. Thank you so much for paying attention in class. Have a wonderful day.