Blended Yield Beats High-Paying Stocks in $1.75 Million Portfolio
A $1.75 million portfolio generating $10,200 per month is achievable through a three-bucket blend of stability, dividend growth, and higher-yield income. This setup spreads the yield burden across these categories to provide a blended yield near 7%, which is essential for working retirees.
The stability bucket holds U.S. government debt via iShares 0-3 Month Treasury Bond ETF (NYSEARCA:SGOV), providing returns of roughly 4% and serving as a low-risk reserve that preserves 12 to 24 months of spending. This fund has traded flat over the past month, with a trailing 12-month distribution totaling $3.76 per share against its current price near $101.
The dividend-growth sleeve references Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) and P&G (NYSE:PG), both of which have paid quarterly dividends. Johnson & Johnson yields 1.9%, while Procter & Gamble yields 2.9%. To reach a blended yield near 3% to 3.5%, the sleeve can be rounded out with broad dividend-growth ETFs such as Schwab US Dividend Equity, Vanguard Dividend Appreciation, and ProShares S&P 500 Dividend Aristocrats.
The higher-yield income bucket carries the heaviest lift in order to lift the blended yield to 7%. Typical categories include business development companies (Ares Capital, Main Street Capital), mortgage REITs, senior loan and CLO income funds, and equity covered-call ETFs in the JEPQ/SPYI category. Yields in the 8% to 12% range are common but so are distribution cuts and NAV erosion during credit or volatility shocks.