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I would go for SWP, annually 6% returns will be withdrawal. 1l+ monthly return while compounding
It sounds like you’re in a great position with the $505k and have made smart moves by paying off your debts. With your goal of generating around $3,000/month in passive income while also preserving your capital, it’s important to balance risk and reward. You're already getting some solid returns with your Treasury Bills ($1,661/4 weeks), but they’re not going to get you to your goal of $3,000/month. I think dividend ETFs could definitely be a good route to explore, but like you mentioned, it can be hard to know which ones are actually safe or risky. Here’s a potential strategy that might help you diversify and get closer to your goal: 1. High-Quality Dividend ETFs: Look for well-established dividend ETFs with a track record of stability and consistent payouts. Funds like VYM (Vanguard High Dividend Yield ETF) or SCHD (Schwab U.S. Dividend Equity ETF) focus on high-quality companies with a history of stable or growing dividends. These can provide solid income with relatively lower risk compared to more volatile options. 2. REITs (Real Estate Investment Trusts): While you're cautious about direct property investing right now, REITs could still offer a decent return. They focus on income-generating real estate and tend to pay higher dividends. Look for ETFs like VNQ (Vanguard Real Estate ETF) or SCHH (Schwab U.S. REIT ETF). Just be mindful that REITs can be more volatile, especially in the current market, so it’s about balancing them in the right proportion. 3. Bonds or Bond ETFs: Given that you’re currently getting income from Treasury Bills, you might want to consider broadening your bond exposure with a mix of government and corporate bonds. Funds like BND (Vanguard Total Bond Market ETF) or AGG (iShares Core U.S. Aggregate Bond ETF) provide diversification and can add stability to your portfolio. 4. International ETFs: To further diversify, you could consider adding some international exposure. There are ETFs like VEA (Vanguard FTSE Developed Markets ETF) that focus on dividend-paying companies outside of the U.S. This can provide a hedge against domestic market volatility. 5. Systematic Withdrawal Plan (SWP): Another option to boost income without solely relying on interest/dividends is a systematic withdrawal plan. With this, you’d withdraw a set percentage (say 5-6% annually) from your initial capital, allowing you to generate a steady stream of income while also taking advantage of long-term market growth. But this approach does carry more risk to your principal. Since your goal is around $3,000/month, that’s $36,000 annually. With your current $505k, you’re targeting a return of about 7% annually. Depending on how you split your investments across dividend ETFs, REITs, and bonds, you can adjust the mix to balance risk and return. At the end of the day, diversification is key. Keep monitoring your portfolio’s performance, and don't be afraid to tweak things as the market changes.