Part 3/7:
5% yield: £240,000
6% yield: £200,000
8% yield: £150,000
Striving for exceptionally high yields can pose significant risks, notably the likelihood of dividend cuts. Excessively high yields can indicate inherent financial instability, lack of growth potential, and unsustainable business practices.
Targeting Sustainable Dividends
For an investor aiming for a 5.5% dividend yield, an investment of approximately £220,000 would be necessary to meet the £1,000 monthly goal. This yield strikes a balance—not too aggressive but relatively profitable—and sustainable. Below are strategies to build a stable dividend-paying portfolio: