Want $4,000 per Year in Monthly Passive Income? Invest Just $2,500 in These Dividend Stocks

Quick Read

• Eagle Point Credit (ECC) generated $52M in total investment income in Q3 and offers a 29.79% forward annual dividend yield.

• Horizon Technology Finance has originated $3.8B in venture loans to over 360 companies and pays a 20.5% forward annual dividend yield.

• YieldMax single-stock ETFs for Microsoft (MSFO), Exxon Mobil (XOMO), and PayPal (PYPY) offer expected annual distribution rates ranging from 38.02% to 52.69%.

• If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more here

Do you need to be a millionaire to earn $4,000 per year with stocks and exchange traded funds (ETFs)? Not at all, and in fact, you may be able to achieve this goal with $2,500 investments in a select group of assets. Plus, you’ll receive cash payouts at least once a month and, to a certain extent, once a week.

The plan is to identify a couple of high-paying stocks that pay dividends on a monthly basis. Then, we can add three mega-yield ETFs that pay weekly so you can maintain your monthly income stream.

Here’s how the math could work. If you invest $2,500 in five assets, that’s $12,500 in total. To get $4,000 per year in dividends/distributions, you’ll need an average yield of at least $4,000 / $12,500 or 32%. That’s ambitious and you’ll have to accept a fairly high risk level, but if that’s not a deal breaker for you, then we’ll reveal the five high-yield picks right now.

Eagle Point Credit Company (ECC)

The first stock pick today is Eagle Point Credit Company (NYSE:ECC), an investment firm that primarily specializes in collateralized loans. The company has a track record of paying dividends each and every month, and plans to continue this practice into 2026.

For this year’s third quarter, Eagle Point Credit Company generated GAAP net income (inclusive of unrealized mark-to-market gains) totaling $15.5 million. This includes $52 million in total investment income, and at the moment, it doesn’t appear that Eagle Point Credit Company will have any problems paying its monthly dividends.

Believe it or not, Eagle Point Credit Company’s forward annual dividend yield is 29.79%. This is rare among individual stocks, and the monthly distributions sweeten the deal even more.

Horizon Technology Finance Corporation (HRZN)

The second stock pick is Horizon Technology Finance Corp. (NASDAQ:HRZN), a lending firm that provides “structured debt products to life science and technology companies.” Impressively, Horizon Technology Finance Corp. has “directly originated and invested” $3.8 billion worth of venture loans to over 360 “growing companies.”

Horizon Technology Finance Corp. doles out cash dividends once per month, but is this a sustainable policy? Since Horizon Technology Finance Corp. recorded $14 million in Q3 2025 net investment income, it appears that the company is currently in good financial condition and the dividends aren’t in immediate jeopardy.

Furthermore, Horizon Technology Finance Corp. offers a tempting 20.5% forward annual dividend yield. However, between ECC stock and HRZN stock, we’re now below the target average yield of at least 32%. To remedy this, we can add a trio of mega-yield ETFs into the mix.

Raise Your Income With These Three ETFs

To raise our average yield up to our 32% objective, it’s not enough to buy $2,500 of ECC stock and $2,500 of HRZN stock. Along with that, we will also allocate $2,500 toward three YieldMax single-stock funds with eye-catching yields.

In general, YieldMax’s single-stock ETFs use income-generating strategies that involve writing covered call options on stocks or synthetic positions. This explains how YieldMax can achieve surprisingly high annual yields on these funds. Additionally, the following ETFs provide weekly cash distributions so you can continue to receive income on a monthly basis or better.

The first of three featured ETFs for today is the YieldMax MSFT Option Income ETF (NYSEARCA:MSFO). This weekly-paying fund uses options-trading strategies to indirectly derive extra income from Microsoft (NASDAQ:MSFT) stock.

According to YieldMax, the expected annual distribution rate for the MSFT Option Income ETF is 52.69%. Granted, it’s riskier to hold the MSFO ETF than Microsoft stock. However, the high yield of the YieldMax MSFT Option Income ETF will get us closer to our goal of $4,000 in annual passive income.

Another $2,500 can be committed to the YieldMax XOM Option Income ETF (NYSEARCA:XOMO), which utilizes similar options-trading strategies to MSFO to create weekly passive income. As you probably figured out immediately, the XOMO ETF is based on the price moves of Exxon Mobil (NYSE:XOM) stock.

Sure, Exxon Mobil shares provide a good annual yield. Yet, if you’re willing to accept higher share-price volatility, then you could achieve a 38.02% distribution rate with the YieldMax XOM Option Income ETF.

Finally, we’ll add a $2,500 stake in shares of the YieldMax PYPL Option Income ETF (NYSEARCA:PYPY). This is yet another YieldMax fund that creates weekly cash payouts through a variety of options-trading strategies.

With the YieldMax PYPL Option Income ETF, you’ll get access to substantial passive income opportunities indirectly based on PayPal (NASDAQ:PYPL) stock. Today, the PYPY ETF advertises a massive 45.13% expected annual distribution rate.

With those five $2,500 investments, the expected average annual dividend/distribution yield will be 37.23%. Congratulations — if the distribution rates don’t decline, then you should have five stock/ETF picks to turn a $12,500 portfolio into more than $4,000 of annual income with monthly and/or weekly payouts.

The New Report Shaking Up Retirement Plans 

You may think retirement is about picking the best stocks or ETFs, but you’d be wrong. See even great investments can be a liability in retirement. The difference comes down to a simple: accumulation vs distribution. The difference is causing millions to rethink their plans.

The good news? After answering three quick questions many Americans are finding they can retire earlier than expected. If you’re thinking about retiring or know someone who is, take 5 minutes to learn more here.