How much should I set aside to live off my dividend income?

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For most people, wanting a comfortable life be it retiring early or having financial freedom it involves having a pool of funds which is a number one priority. However, figuring out how much you need to be invested so that you can finally retire can be as challenging as saving for a comfortable retirement.

So how exactly do you live off your dividend income?

Here are some of the things you may need to consider:

1. Figure out how much you are earning now.
2. Figure out how much dividend income you want annually upon retiring.
3. Figure at what age do you want to retire. Early or retirement age?
4. Calculate how much you need to be invested in dividend-paying stocks so that the annual dividend yield provides you with your desired annual income.
5. Find out which type of dividend-paying stocks best suits your requirements, (eg div yields, type of stocks, volatility, industry etc).
6. Lastly, find out how much you need to set aside monthly or annual to achieve this sum of money.

“If you don’t know where you are going, you will go nowhere.”- Henry Kissinger

Things to consider