$50,000 In SCHD Will Beat Your Full Time Job! 🔥

Summary

This video explores the Schwab US Dividend Equity ETF (SCD) as a potential investment to outpace a full-time job's income. It highlights SCD's low expense ratio, focus on dividend growth, and its diverse portfolio of stable stocks. The presenter uses conservative estimates to demonstrate how reinvesting dividends can significantly grow a $50,000 investment over 30 years, illustrating the power of compounding and the potential for SCD to provide substantial annual dividend income, even with modest contributions.

Takeaways

• 💼 The video discusses the Schwab US Dividend Equity ETF (SCD) as an investment that could potentially replace a full-time job's income.
• 📈 SCD has a low expense ratio of 0.06%, which is beneficial for long-term investors looking to minimize costs.
• 🌱 The ETF focuses on dividend growth, selecting stocks that not only pay dividends but also have the potential to increase them over time.
• 💹 SCD's performance has been strong, with a 212% increase since inception and an average annual growth of 19%, although the video uses more conservative estimates for future calculations.
• 🏆 The top holdings of SCD are stable, well-established companies, providing a sense of security and reliability for investors.
• 📊 The sector exposure of SCD is well-balanced, which helps in spreading risk across various industries.
• 💲 The trailing 12-month dividend yield of SCD is 3.41%, offering a consistent income stream for investors.
• 📈 The video illustrates how reinvesting dividends can significantly grow an investment over a 30-year period due to the power of compounding.
• 💡 Using conservative growth estimates, a $50,000 investment in SCD could grow to over $850,000 after 30 years, with an annual dividend income of over $52,000.
• 🚀 The video suggests that even a smaller initial investment with regular contributions can grow substantially over time, highlighting the importance of starting early and consistency.
• 🌐 Investing in SCD within a tax-advantaged account like a Roth IRA or 401k could further enhance returns by eliminating dividend tax rates.

Q & A

What is the Schwab US Dividend Equity ETF, and what does the ticker symbol SCD represent?

The Schwab US Dividend Equity ETF is an exchange-traded fund that focuses on dividend growth, investing in a mix of stocks across various sectors. The ticker symbol SCD represents this ETF, making it easily identifiable for trading purposes.

What is the expense ratio of the Schwab US Dividend Equity ETF, and why is it significant?

The expense ratio of the Schwab US Dividend Equity ETF is 0.06%, which is significantly low. This is important because it means that the ETF has minimal fees, allowing investors to keep more of their returns without being eroded by high costs.

Why is the focus on dividend growth important for SCD?

The focus on dividend growth is important because it means that SCD specifically selects stocks that not only pay dividends but also have the potential to increase those payouts over time. This provides investors with the opportunity for growing income streams along with the potential for capital appreciation.

How does the lower interest rate environment impact dividend-paying companies and SCD?

In a lower interest rate environment, borrowing money becomes cheaper for companies, including those held by SCD. This can lead to increased profits for these companies, which may result in higher dividend payouts for investors, making dividend stocks more attractive.

What are some of the top holdings of SCD that contribute to its stability?

Some of the top holdings of SCD include stable and time-tested companies such as Texas Instruments, UPS, Home Depot, Black Rock, Cisco Systems, Pepsi, Lockheed Martin, Pfizer, Chevron, and Bristol Meyers Squibb. These holdings provide a solid foundation for the ETF's performance.

What is the current trailing 12-month dividend yield of SCD, and why is it significant?

The current trailing 12-month dividend yield of SCD is 3.41%. This is significant because it indicates the ETF's ability to provide a consistent income stream to investors, which is a key factor for those seeking steady returns.

How has SCD's dividend growth performed over the last 10 years?

Over the last 10 years, SCD's dividend growth has been steadily increasing, showcasing the ETF's ability to provide growing income to its investors over time.

What are the conservative expected annual dividend amount increase and share price appreciation percentages used in the script's calculations?

The conservative expected annual dividend amount increase percentage used in the calculations is 8%, and the expected annual share price appreciation percentage is 6%. These conservative estimates are used to provide a more realistic long-term outlook.

How does reinvesting dividends back into SCD contribute to wealth building over a 30-year period?

Reinvesting dividends back into SCD allows investors to take advantage of the power of compounding gains. As dividends are reinvested to purchase more shares, the investment grows exponentially over time, similar to rolling a snowball down a hill, becoming larger as it accumulates more.

What is the potential outcome of a $50,000 investment in SCD over 30 years, based on the conservative calculations provided in the script?

Based on the conservative calculations, a $50,000 investment in SCD over 30 years could grow to approximately $852,183, with an annual dividend income of over $52,400, demonstrating the potential for significant wealth accumulation and passive income generation.

What are the benefits of investing in SCD within a tax-advantaged account like a Roth IRA or Roth 401k?

Investing in SCD within a tax-advantaged account like a Roth IRA or Roth 401k can significantly enhance returns by eliminating the dividend tax rate, allowing for more capital to be reinvested and compound over time, thus potentially increasing the overall wealth generated from the investment.

Outlines

00:00

💰 Unlocking Financial Freedom with Schwab US Dividend Equity ETF

Discover how a $50,000 investment in the Schwab US Dividend Equity ETF (ticker symbol SCD) can potentially outpace your full-time job's income. Learn about its low expense ratio, dividend growth focus, and why it's a great choice for long-term investments. The video will cover the ETF's performance, real-world examples, and the benefits of investing in SCD.

05:00

📈 Analyzing the Schwab US Dividend Equity ETF

The Schwab US Dividend Equity ETF offers a mix of stability, dividends, and growth potential with a minimal expense ratio of 0.6%. This ETF focuses on dividend growth, selecting stocks with the potential to increase payouts over time. It provides a diversified portfolio across various sectors, making it a solid choice for those looking to build a retirement or investment portfolio with steady income and growth.

10:01

🌟 Why I Love SCD and Its Investment Potential

SCD's trading price, the impact of the FED's interest rate policies, and the ETF's top holdings are discussed. Lower interest rates can benefit dividend-paying companies, leading to higher stock prices for SCD. The ETF's balanced sector exposure and stable stock selections make it a low-risk option for conservative investors. The importance of dividend growth and its steady increase over the years is also highlighted.

🧮 Calculating Dividends with Conservative Numbers

Using conservative figures, the video demonstrates the potential growth of a $50,000 investment in SCD over 30 years. By reinvesting dividends, the investment can grow significantly due to compounding gains. The video also covers different scenarios with varying initial investments and monthly contributions, showing how consistent investing can lead to substantial returns over time.

📊 Exploring Dividend Calculator Scenarios

Different scenarios using the dividend calculator are explored, including investing in a Roth IRA or Roth 401k for tax advantages. The video emphasizes the potential for higher returns and dividend income over 30 years with smart, conservative investing. It highlights the importance of starting with a reasonable amount and consistently growing the investment to achieve significant financial growth.

🔍 Recap and Key Insights for Investors

The video recaps the conservative projections for a $50,000 investment in SCD, showing how it can grow to $853,000 with over $52,000 in annual dividend income after 30 years. It stresses the importance of smart investment choices and the power of compounding gains. The video aims to inspire viewers to consider SCD as a valuable option for building a financial future and achieving a comfortable retirement.

Keywords

💡Schwab US Dividend Equity ETF

The Schwab US Dividend Equity ETF, also known by its ticker symbol SCD, is an exchange-traded fund that focuses on US companies with a history of paying dividends and potential for dividend growth. In the video, it is presented as an investment option that could potentially outpace a full-time job's income through a combination of dividends and growth. The ETF is described as having a low expense ratio of 0.06%, which is crucial for maximizing returns over time.

💡Dividend Growth

Dividend growth refers to the increase in the dividends paid out by a company over time. It is a key feature of the SCD ETF, which specifically selects stocks that not only pay dividends but also have the potential to increase those dividends. The video emphasizes the importance of dividend growth for long-term investment strategies, as it can provide a steady income stream that grows over time.

💡Expense Ratio

The expense ratio is the annual fee that all funds charge their shareholders. For the Schwab US Dividend Equity ETF, the expense ratio is highlighted as being 'impressively low' at just 0.06%. This is significant because lower fees allow more of the investment returns to go to the investor rather than being deducted as costs, which can substantially impact long-term gains.

💡Consistent Dividend Yield

Consistent dividend yield is the regular payment of dividends by an investment at a steady rate. The video script mentions that the SCD ETF has a trailing 12-month dividend yield of 3.41%, which is not exceptionally high but is consistent and reliable. This consistency is attractive to investors seeking a steady income stream from their investments.

💡Reinvestment

Reinvestment is the process of plowing back the dividends received from an investment into additional shares of the same investment. In the context of the video, reinvesting dividends in the SCD ETF is presented as a strategy to grow wealth through compounding, where the dividends earned are used to buy more ETF shares, increasing the overall investment and the potential for future dividend income.

💡Compounding Gains

Compounding gains refer to the effect where investment returns are reinvested to generate additional returns over time. The video uses the metaphor of a 'snowball rolling down a hill' to illustrate how reinvesting dividends in the SCD ETF can lead to significant wealth accumulation through the power of compounding over a 30-year period.

💡Portfolio Diversification

Portfolio diversification is the practice of spreading investments across various financial instruments, industries, or other categories to reduce risk. The video explains that the SCD ETF offers a balanced sector exposure, with investments spread across industrials, financials, healthcare, consumer staples, energy, and more. This diversification helps to mitigate the impact of any one sector's poor performance on the overall portfolio.

💡Top Holdings

Top holdings are the largest investments in a mutual fund or ETF, usually measured by the percentage of the fund's total assets they represent. The video script lists the top 10 holdings of the SCD ETF, including companies like Texas Instruments, UPS, and Home Depot, which are considered stable and have a history of paying dividends, contributing to the ETF's appeal for conservative investors.

💡Stock Appreciation

Stock appreciation refers to the increase in the price of a stock over time. The video mentions that the SCD ETF has appreciated by 212% since its inception, which is an average of about 19% per year. However, for the purposes of the investment scenario presented, a more conservative estimate of 6% annual share price appreciation is used to illustrate potential future growth.

💡Tax-Advantaged Accounts

Tax-advantaged accounts, such as Roth IRAs or Roth 401(k)s, offer tax benefits that can enhance investment growth. The video script suggests that investing in the SCD ETF within such an account could further boost returns by eliminating the dividend tax rate, allowing for even greater accumulation of wealth over the long term.

💡Annual Dividend Income

Annual dividend income is the total amount of dividends received from an investment over the course of a year. The video script projects that an initial investment of $50,000 in the SCD ETF, with reinvested dividends and conservative growth assumptions, could generate an annual dividend income of over $52,000 after 30 years, illustrating the potential for significant passive income generation.

Highlights

Investing in Schwab US Dividend Equity ETF (SCD) could potentially outpace a full-time job's income.

SCD has a low expense ratio of just 0.06%, making it cost-effective for investors.

The ETF focuses on dividend growth, selecting stocks with potential for increasing payouts over time.

SCD offers a mix of stability, dividends, and growth potential across various sectors.

SCD's top 10 holdings include stable, time-tested companies like Texas Instruments and Pepsi.

Sector exposure of SCD is well-balanced, providing diversification and risk mitigation.

The trailing 12-month dividend yield of SCD is 3.41%, offering consistent returns.

Dividend growth over the last 10 years has been steadily increasing for SCD.

Lower interest rates can lead to higher stock prices for dividend-focused ETFs like SCD.

Conservative investment scenarios suggest significant growth potential for SCD over 30 years.

Reinvesting dividends in SCD can supercharge investment growth through compounding.

An initial $50,000 investment in SCD could grow to over $850,000 after 30 years.

Starting with a smaller investment and adding contributions can also lead to substantial growth.

Investing in tax-advantaged accounts can further enhance the returns from SCD investments.

SCD's consistent dividend payouts and share price growth make it a strong choice for long-term investors.

The belief that a massive fortune is needed for investment success is debunked by smart choices like SCD.

SCD offers a balanced approach to earning from market fluctuations with the added benefit of cost-effectiveness.

Transcripts

are you dreaming of the day your

investment can finally set you free from

your 9 to-5 grind well that day might be

closer than you think today we're diving

into the Schwab us dividend Equity ETF

better known as ticker symbol SCD and

showing you how an initial $50,000

investment could potentially outpace

your full-time job's income your time's

valuable and I'm not going to keep you

hostage here's everything we're going to

talk about today number one we'll

explore Schwab's us dividend Equity ETF

and dive into what it is its low expense

rtio and its dividend growth Focus

number two we'll cover whyd excites me

and discuss its performance and

consistent dividend yield number three

we'll go over a real world example and

I'll illustrate how $50,000 in SD could

outperform your full-time job through

dividends and growth plus I'll give you

a couple of other bonus scenarios and

number four I'm going to wrap things up

by shining a spotlight on the incredible

benefits of SD as a long-term investment

and trust me you'll want to stick around

to the very end because the grand finale

it's going to be epic something you

definitely did not see coming and if

you're new here don't forget to hit that

subscribe button and ring the bell so

you never miss an

[Music]

update

all right let's dive into the famous

Schwab us dividend Equity ETF and cover

what it is what it does and its

impressively low expense ratio of just 0

6% think of Schwab as your future

retirement that you can use to get peace

of mind that gives you a solid foothold

in the market with a mix of stability

dividends and growth potential this ETF

or exchange traded fund is like a

carefully curated playlist of stocks

across various sectors offering you a

piece of the action in everything from

Tech to healthcare but here's where it

gets interesting what sets SCD apart is

its focus on dividend growth meaning it

specifically picks stocks that not only

pay dividends but have the potential to

increase those payouts over time all

while keeping your cost low with its

minimal expense ratio so investing in SD

is like planting a seed that grows not

just through the value of the ETF itself

but through increasingly larger dividend

checks without eating into your returns

with high fees it's designed for those

who are playing the long game looking

for steady income and growth making it a

standout option for building your

investment or retirement portfolio in

essence SCD is more than just an ETF

it's a gateway to financial growth

offering a balanced approach to earning

from the markets ups and downs with the

added perk of being incredibly

cost-effective while always paying

dividends let's break down why I love

CHD and I think you'll see why it's not

just any ETF on the market picture this

SCD is currently trading at around $79

per share and it's near the all-time

highs which beckons the question of can

it go higher first we're looking at the

big picture and having SD as a 30-year

investment so in the overall scope

today's price doesn't matter over a

30-year time frame and second the FED

plans to lower interest rates which

makes borrowing money cheaper for

everyone including big companies for an

ETF like SD which holds a bunch of these

big companies that payout part for an

ETF like SD which holds a bunch of these

big companies that pay out part of their

profits as dividends this is great news

lower interest rates mean these

companies can save money on their loans

make more money because people are

spending more and ultimately share more

profits with their investors through

bigger dividends dividend stocks

especially those with stable and

reliable payouts become more valuable to

investors in a lower interest rate

environment because investors are

willing to pay more for the perceived

safety and income generation of these

stocks which is likely to lead to a

higher stock price for SD but here's

where it gets really exciting for

conservative investors that desire a

low-risk portfolio the top 10 Holdings

ofd are stable stocks that have

withstood the test of time Texas

Instruments UPS Home Depot Black Rock

Cisco Systems Pepsi Lockheed Martin

fizer Chevron and Bristol Meyer squib

it's a dividend lovers dream portfolio

diving deeper SD sector exposure is

brilliantly balanced with 17.12% in

Industrials 16.73% in financials 15.9%

in healthcare 11.95% in consumer staples

9.2 25% in energy and the rest are

spread across various sectors this level

of diversification means you're not

putting all your eggs in just one basket

even if a few stocks don't perform as

expected the etf's broad coverage

Shields you from significant impact now

let's talk about dividends the trailing

12-month dividend yield is

3.41% which may not be that high but it

is consistent in something we can likely

count on for years to come here you can

see SD's dividend growth over the last

10 years has been steadily increasing

and you'll see why this is important

when we start plugging the numbers into

the dividend calculator I'm going to use

conservative numbers today now one key

figure we need is the average yearly

growth of the dividend payout over the

last 11 years from 2013 to 2023 it's

been

11.16% keep this 11.16% in mind because

I'm going to be even more cautious and

use 8% in the dividend calculator for

the expected annual dividend amount

increase percentage per year I want to

make sure these numbers aren't confusing

our next key figure is the stock

appreciation since Inception SCD has

increased by

212% which is about 19% per year however

I think that's too high and not

realistic to continue moving forward

looking at the 5-year average it's

10.37% I'm going to be super

conservative and use 6% for our expected

annual share price appreciation

percentage in our calculations the key

figures I'm using for both the expected

annual dividend amount increase

percentage and expected annual share

price appreci appreciation percentage in

the dividend calculator are much lower

than the historical averages I want to

make sure you know where these numbers

come from so you don't think I'm just

making this stuff up I'm being extra

conservative on purpose if you like how

I'm breaking this down and being careful

with the numbers let me know in the

comments so I know to include these

types of explanations in my future

videos looking at the bigger picture

with these conservative numbers I'm

going to show you why SD is a great

choice for long-term investors the real

magic happens when you reinvest your

dividends back into SD to purchase more

shares this method allows you to

supercharge growing your investment over

the next 30 Years thanks to the power of

compounding gains it's like rolling a

snowball down a hill the more it rolls

the bigger it gets that's the secret

behind Building Wealth with SCD now let

me show you how just $50,000 in SD could

beat your full-time job and retire you

rich and if you feel I've earned it a

quick hit on the like And subscribe

button show some love and support for my

videos and for those diving deeper into

trading my patreon has real-time Trading

alerts and if you're interested in

trying out my custom trading view

indicators there's a free trial link

below thanks and with that covered let's

play with the dividend calculator so you

can see the math let's get our dividend

calculator set up first thing we want to

come down to the distribution frequency

and we want to change that to quarterly

we want to make sure the drip is on so

we're reinvesting our starting principal

is going to be

$50,000 dividend tax rate will'll leave

that at 15% the initial annual dividend

yield that's

3.41% are expected annual dividend

amount increase percentage per year is

8% and we just covered where that number

came from the expected annual share

price appreciation 6% and remember both

of these numbers are conservative our

years invested are 30 now let's go ahead

and calculate the dividends in our first

year we're starting with $50,000 in

principal our annual dividend works out

to

$1,726 193 and if you look at the

numbers they're not that impressive and

that's completely normal after 5 years

we're looking at principal of

$7,695 annual dividend

$2,631 10 years we're at

$110,000 and

$451 in dividends after 15 years now

it's starting to get a little bit better

$174,300

$785 in dividends dropping down to 20

years

$280,000 with

$3,893 in dividends 25 years

$459,000 with over $255,000 in dividends

and now you can see the cumulative

effect and big changes are happening and

at the end of 30 years we're at

$767,000 and $

46,4 in dividends so to summarize our

dividend portfolio after 30 years it's

up to

$852

1838 the total return 1,

166% average annual return return 99.92%

and the annual dividend income is now

$52,400 into SCD today so let's play

with some different numbers let's go

with $10,000 of starting principal and

our annual contribution let's do $100 a

month so that would be $1,200 per year

we'll keep everything else the same if

we're going to calculate the dividends

now we're going to see still quite

sizable after 30 years

$374,000 a total return of

73% and our average annual return

7.24% let's say you can beef that up a

little bit and go $200 a month so we're

at

$2,400 hit the calculate button and now

we're looking at

$577,000 a 6.72% annual return and the

annual dividend income

$35,200 a month which many of you guys

can swing so that would be $3,600 a year

and when we calculate dividends look at

this

$781,000 roughly a total return of

561 average annual return 6.5% not too

bad and our annual dividend income is

now up to $

47,7 and now as a bonus I want to give

you one more scenario I'm a real big fan

of investing in tax advantage accounts

so if you could do this in a Roth or a

Roth 401k you wouldn't have any dividend

tax rate and double check with your CPA

on that so let's change that dividend

tax rate to 0% and let's see how it

changes our numbers all we do is hit the

calculate dividends button and boom our

ending balance is now

$1,290 average annual return up

10.61% and our annual dividend income is

$

62,3 se8 guys if you can do this in a

Roth IRA or a Roth 401k definitely

seriously consider going that route

playing with the dividend calculator is

fascinating and while we can't know for

sure how the next 30 Years will unfold

I've chosen very conservative numbers

compared to SD's past performance my

conservative approach suggests there's a

strong possibility that the actual

results will be much higher here's a key

Insight that strikes a chord with every

investor whether you're well experienced

or just beginning the belief that you

need a massive Fortune to build a future

where your investment support you is

just not true with smart choices like

SCD even a single investment of $50,000

or starting small and consistently

growing your SD portfolio could grow to

replace $50,000 in income over time

patience and smart investing can make a

huge difference let's recap our

conservative numbers the $50,000

investment in CHD turned into $853,000

the total return is 1, 166% the average

annual return is 99.92% after 30 years

the annual dividend income is over

$52,000 if you're curious ious about how

the portfolio looks using the 5-year

historical averages hang tight I'll

share those numbers with you in just a

moment today's video goes beyond just

investing it's about making wise

investment choices with an ETF known for

its consistent dividend payouts and

potential for share price growth if

you're aiming for a financial

GameChanger diving deeper into SCD could

be the move that helps you build your

financial future and sets you up for a

great retirement don't forget to check

out my daily pre-market insights on my

YouTube Community tab to stay a step

ahead in the investment game

[Music]

name

keep it real and I'll catch you in the

next

video