One fundamental question that all investors ask themselves is how much money do I need in order to be able to retire. There are many methods that could help retirees generate enough cash in retirement. I have discussed the shortcomings of the popular four percent rule in previous articles. Today, I am going to discuss the concept of using dividend paying stocks for generating income in retirement.
The concept is relatively simple and involves a few easy to follow rules:
1) Accumulate a certain amount of money
2) Invest that money regularly in quality companies that pay a dividend
3) When the dividends from these income stocks exceed your expenses you are financially independent