ETF Dividends To The Rescue
She didn't know how to get started investing in the stock market, then this young woman investor found ETFs and immediately saw a path to retirement using dividends.
Almost 2 years into college, She decided she wanted to start her investing journey. She found ETFs and discovered that they mimic the stock market that averages a 10% return a year and some provided dividends that would contribute to her retirement income. She realized that If each ETF paid 8-10% a year in dividends, she would just need $500,000 to retire early with 50k a year income. She got a job paying 110k a year after graduation and decided to live off half her income for 10 years. She then was able to leave her job and focus all her time on new projects that were important to her at 35 years old.
ETFs can be purchased or sold on a stock exchange the same way that a regular stock can.
So what are ETFs, An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.
KEY TAKEAWAYS
An exchange-traded fund (ETF) is a basket of securities that trades on an exchange just like a stock does.
ETF share prices fluctuate all day as the ETF is bought and sold; this is different from mutual funds, which only trade once a day after the market closes.
ETFs can contain all types of investments, including stocks, commodities, or bonds; some offer U.S.-only holdings, while others are international.
ETFs offer low expense ratios and fewer broker commissions than buying the stocks individually.