How I’m Building A £1,000 A Month Dividend Income Stream

Happy Monday! So I’m back again talking about my favourite topic – building a dividend income stream. This time, it is all about the numbers. How I am building that £1,000 a month dividend income stream which will support us when we reach our early retirement goal. Building this passive income stream will help us to achieve that goal. But it is a long term aim. We will need to save and invest a LOT in-between now and then. Financial freedom is such a big dream of ours, so building this dividend income stream is so important to us.

 

How do we intend to build a dividend income stream?

Firstly, I invest within a stocks and Shares ISA. I have mine with Hargreaves Lansdown as I found it the easier platform to navigate. I would recommend them, though obviously there are other options available 🙂 the reason why I invest within an ISA is because of the tax benefits. Anything I invest within that tax wrapper is sheltered from having to pay tax on it. So any dividends I receive, plus any growth from the stocks and/or funds that I have are protected from having to pay tax on them. Win!

 

The next aspect of building this dividend income stream is time. And, at the moment, time is on our side! It should help in creating more wealth than we can actually save. How? Because of compounding. Every single dividend income payment we receive at the moment is re-invested back into shares/funds. That then creates more income and the cycle continues. The more time passes, the bigger these dividend income payments should be [that’s the plan anyway!] and so then re-investment will buy even more and so on. That’s how the rich get richer! And we are starting at the bottom 🙂

 

Another part of building this dividend income stream is consistency. We have to be consistent with our savings. There is no point saving lots one month and then nothing the next. After all, slow and steady wins the race! So the plan is to invest £700 minimum from now until we reach this goal. £700 each month is a big chunk of our household income, so it is not always that easy!

 

However, in my monthly aims post every month my savings/investment target is £700 and this is why. Yes, I would like it to be more but unless I figure out a way of making a lot more income, then £700 is the most we can stretch to, at the moment. If you buy something from The Frugal Cottage shop, or support me on Patreon, that would help 😉 I provide up-to-the-minute updates over on my Patreon so make sure you join me over there.

 

Why £1,000 a month?

I have sat and worked out our minim expenses for early retirement and £1,000 would cover most of it a month. Yes, we wouldn’t have a luxurious lifestyle but it would be a start! This is assuming we have become mortgage free and have very little outgoings. Obviously, if we could get to more than this, then fantastic! However, building a £1,000 a month dividend income stream on our [fairly] low incomes will be difficult enough. So I don’t want to dream too big and be disappointed! If we reach this and still have some time, then we might change the goal. Who knows 🙂

 

If this sounds like something you’d be interested in doing, then come and join me in a live workshop about how to start investing. It is an hour long workshop where you will get all the information and skills to start investing and building your own dividend income stream.

 

So there we have it! My plan to build an £1,000 a month dividend income stream. I will keep you updated – monthly through my dividend income posts and in real time over on my Patreon. It’s going to be a long journey but I am excited 🙂

 

Have you started investing to receive a dividend income? I’d love to hear from you!  

 

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