Most people’s eyes will glaze over when they ask me how to start building their 5% dividend portfolio, and I realize that sometimes, we overcomplicate things.
As usual, keeping things simple is still the best way. Here’s how I build my 5% dividend portfolio on a simple basis:
- Set aside 25-50% of my income for investing
- Go through my country’s index fund and look for all dividend paying companies that made it into the index list AND pays at least 5% dividends
- Shortlist these to the top 10
- Invest the set-aside 25-50% regularly (monthly, quarterly or half yearly)
- Collect and reinvest at least 50% of dividends
That’s it – dont overcomplicate it.