Finding money to invest in the stock market can be challenging, especially amid inflation and tariffs. But if you can find $50 to put away into the stock market every week, you might be able to collect dividend income of $50,000 or more in the future.
Continually investing in the market is a great strategy given the strong likelihood that your portfolio will rise in value. And while you might not think that a $50-per-week investment is worth it, it can be one of the best habits you start this year.
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Find a solid investment to put money into
The first thing you should consider doing is finding some stocks or an exchange-traded fund (ETF) you like and want to invest in. By doing this, you can simplify your investing strategy by not having to worry about where to invest your money every week. If the process is too cumbersome, it will be harder to stick with.
An ETF may be more suitable for this type of strategy. Since it will already hold a diverse basket of stocks, there’s no need to worry about individual stocks. You can invest in multiple ETFs, but at the very least, you should consider having one go-to fund as your default investment.
One great option is the Invesco QQQ Trust (NASDAQ: QQQ), which gives you exposure to the top 100 non-financial stocks on the Nasdaq exchange. This means you can benefit from the long-term growth of many top growth stocks, including Nvidia, Microsoft, and Apple. During the past decade, this ETF has soundly outperformed the market.
^SPX data by YCharts
Increasing your portfolio to more than $1 million
Through the power of compounding, a $50-per-week investment that averages a 10% growth rate, which is in line with the S&P 500’s long-term average, can lead to a significant balance later on. Here’s how high that balance might be if you continue investing every week for 30-plus years.
|
Future Portfolio Balance ($50/Week Investment) |
|
|---|---|
|
Year |
10% annual growth rate |
|
30 |
$495,673 |
|
31 |
$550,488 |
|
32 |
$611,062 |
|
33 |
$678,000 |
|
34 |
$751,970 |
|
35 |
$833,713 |
|
36 |
$924,044 |
|
37 |
$1,023,865 |
|
38 |
$1,134,174 |
|
39 |
$1,256,073 |
|
40 |
$1,390,779 |
Calculations by author.
Turning the balance into dividends
To ensure you’re generating $50,000 in annual dividends, you’ll need a balance of about $1.1 million. To generate that much in income, target investments that yield about 4.6%; you don’t have to look for high-yielding dividend stocks, which can often carry significant risks. And to be clear, this money can and probably should be spread across multiple investments that pay an average of 4.6% — you probably shouldn’t put all of your savings in just a single stock or ETF.
And from the table above, you can see that it would take about 38 years for this investment strategy to get to $1.1 million. This is assuming, of course, that you average a 10% return. You might do better or worse. A bit of uncertainty is unfortunately par for the course when it comes to investing.
Multiple ETFs yield more than 4%. For example, the SPDR Portfolio S&P 500 High Dividend ETF yields 4.3%. There are also higher-yielding options, which may be a bit riskier. Years from now, there may be more investment options to consider besides just ETFs. But the big takeaway is that once you’ve built up a significant balance, it will be easier to generate $50,000 in annual dividend income without having to worry about taking on a lot of risk.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends Nasdaq and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
