Caitlyn Moorhead

Mon, Jun 16, 2025, 10:01 AM4 min read

The goal of any investment you make in the stock market typically centers around maximizing your total returns and dividend payout ratio. When it comes to dividend payouts or a high dividend-paying stock, understanding the nuances of what to buy and how dividends are paid can be the difference between a little extra passive income and heavy cash flow for either short-term or long-term investments.

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Dividends are payments, typically based on profits, that an established company makes to its shareholders. Though companies are not required to pay any type of dividend, many make it a habit to do so, especially in financially fruitful consecutive years.

Companies have no timetable to make payments or even raise them, but they typically pay regularly — often monthly, quarterly or twice each year. A class of stocks referred to as “dividend aristocrats” have a track record of increasing their annual dividends every year for at least 25 years.

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To make $1,000 per month in dividend stocks, you could model the path of financial blogger, Sam Tran, author of My Dividend Snowball, who speaks to his journey of how he achieved his goal of earning $1,000 monthly to achieve financial freedom.

He said, “Last month I received over $1,000 of dividends. This is the first time I received over $1,000 per month while I am sitting on the couch and watching TV all day.”

Here are some of Tran’s key takeaways:

• Diversify: Tran said that “one should have at least 30 stocks in at least 10 different sectors… Diversification can help an investor manage risk and reduce the volatility of an asset’s price movements and dividend cuts.”

• Be patient and consistent: “You need time and regular monthly contribution[s] to build your sizable dividend portfolio.”

• Weigh risk and reward: “If you invest in a higher-yield company like Iron Mountain IRM, your portfolio only needs to have $132,680. However, if you invest in everyone’s favorite dividend company Johnson and Johnson JNJ, you will need at least $439,366 in your portfolio. If you like Apple or Microsoft, you will need almost $1.2 million or $1.4 million. For a low-yield dividend like Visa, you may need to invest around $2 [million]. Investing in one stock to generate $1,000 per month income would take too much risk for an individual.”