The Appeal of “High-Dividend Stock Investing” to Achieve 240,000 Yen in Annual Passive Income

When you hear the term “passive income,” what comes to mind? Is it something like suspicious, shady, that can’t possibly exist, or being scammed? That might be it. Certainly, passive = not having to work, income = receiving money. It’s no wonder people are suspicious just hearing that phrase. However, a system for receiving money without working does exist. That is “high-dividend stock investing.” As of today, I have achieved 240,000 yen in annual passive income, or 20,000 yen per month, through high-dividend stock investing. Today, I would like to talk about the appeal of such high-dividend stock investing. The appeal of high-dividend stock investing, I believe, lies in these five points: 1. Increased money you can use “now” 2. Easier to calculate “income other than labor income” 3. Resilience against inflation 4. No need to worry too much about stock prices 5. Gaining a sense of becoming free I will explain them one by one.1. Increased money you can use “now”Are you doing “accumulation investing” through NISA? Many people doing accumulation investing are likely buying “S&P 500” or “All Country” funds. These are what are called “index investments,” where you accumulate monthly and only the digital asset value fluctuates. I imagine you don’t feel like your daily life is becoming more affluent. On the other hand, with high-dividend stock investing, once you buy, a certain amount of dividends is distributed from the stocks you hold. In other words, I think the big difference between high-dividend stock investing and index investing is that you can manage your assets while receiving money that you can use “now.”2. Easier to calculate “income other than labor income”Dividends obtained from high-dividend stock investing are said to be an investment that is somewhat easy to predict. Why? Companies that pay dividends announce the dividend amount in advance, saying “we will pay this much in dividends this time” or “we plan to pay this much next time” at each financial closing or earnings announcement. *Some companies do not disclose dividend amounts. Therefore, it becomes easier to predict how much dividend income you can expect from the stocks you hold and how much you should receive next year. I hold mostly Japanese stocks, and the Japanese stocks I hold often concentrate their dividend payments in March, June, September, and December, and almost all of them announce the dividend amount in advance. So, I can predict in advance how much I will receive and in which month, making it easier to calculate the offsetting of living costs.3. Resilience against inflationThe recent rise in prices. Also called inflation, being able to counter this inflation is also a merit of high-dividend stock investing. If the price of goods rises due to inflation, profits are added accordingly, and business performance improves. If business performance improves, stock prices are pushed up, and dividend amounts also increase. If you did not hold stocks or similar assets that could counter inflation, you would likely only be holding cash. If inflation were to progress at 2% per year, the real value of 10,000 yen would drop to 8,203 yen in 10 years, 6,730 yen in 20 years, and 5,454 yen in 30 years. If you only hold cash, you are accepting a loss against inflation and a reduction in real assets, and your assets will slowly decrease.4. No need to worry too much about stock pricesHigh-dividend stock investing basically means you don’t sell once you buy. So, not having to worry about daily stock price fluctuations is also a merit. I imagine people doing day trading are worn out mentally, feeling happy or sad depending on whether prices go up or down. On the other hand, with high-dividend investing, as long as they pay dividends stably, that’s fine, so I hardly care whether the stock price goes up or down. Of course, it feels healthier to have a plus than a minus, but if the stock price goes up, I can’t increase my holdings, so I have mixed feelings. When doing stock investing, not having to worry about stock prices is quite mentally relaxing.5. Gaining a sense of becoming freeAs dividends accumulate year by year, “Oh, I can now cover my gas bill with this” or “My gym membership is free for life!” feelings like these start to emerge. In other words, since I have created a world where I can cover fixed costs without working, I get the feeling that freedom is getting closer. I currently hold the right to receive 240,000 yen per year, or 20,000 yen per month, in dividends, and at 20,000 yen per month, I am in the territory of being able to pay for gas, water, and gym fees. If this becomes 50,000 yen per month, I will be able to cover electricity bills, and if it becomes 100,000 yen per month, I will be able to put it toward part of my mortgage. Just fantasizing about this is enough to make me eat three bowls of rice. I think this fantasy is precisely why I can continue for the long term. What do you think? Did the appeal of high-dividend stock investing come across? I plan to continue buying high-dividend stocks and increasing my passive income. I will be sharing my progress, so I hope you look forward to it.