Want Decades of Passive Income? Buy This ETF and Hold It Forever.

It's ever bully to get paid for the enactment you do, but it's adjacent amended to get paid portion doing nothing, and that's the quality of passive income. Whether it's rental income, royalties, oregon dividends, passive income is wealth that works portion you're not working.

Thankfully, passive income successful the banal marketplace is arsenic elemental arsenic buying a dividend banal oregon exchange-traded money (ETF) and holding onto it. It's a mode to get rewarded simply for being patient. You don't person to trust lone connected stock-price maturation to marque money.

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Not each dividend stocks oregon ETFs are created equal, though. Some are built for semipermanent success, similar the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). If you're looking for decades of passive income, it's a large go-to money to see today.

With immoderate dividend ETFs, you person to interest astir output traps (an charismatic output connected a atrocious business) due to the fact that the ETF is chiefly acrophobic with the yields of the stocks it holds. However, this isn't the lawsuit with this Schwab ETF. It lone includes businesses with astatine slightest 10 consecutive years of dividend increases, a beardown currency travel comparative to debt, and a precocious instrumentality connected equity.

This people keeps distant subpar businesses that whitethorn not person a sustainable dividend. If you're looking for decades of passive income, sustainability is important. Here are SCHD's apical 10 holdings and their dividend yields astatine the clip of this writing:

Table by author. Dividend yields are arsenic of March 18.

You'll announcement that you don't spot immoderate big-name tech stocks oregon young, high-growth stocks. What you bash see, however, are unchangeable businesses that marque accordant wealth and person stood the trial of time. "Boring" businesses whitethorn not marque headlines but are often much shareholder-friendly than those that do.

With an mean dividend output supra 3% implicit the past decade, the Schwab U.S. Dividend Equity ETF is an charismatic income enactment (around $30 paid per $1,000 invested annually). However, the existent results tin travel by reinvesting your dividends and past taking currency payouts down the road.