Dividends & Discomfort: A (Reluctant) Guide

People keep asking me about passive income. As if I’m some kind of guru, lounging on a chaise, letting money roll in. The truth is, I mostly just worry. Worry about the market, worry about interest rates, worry about whether my cat is judging my life choices. But, alright, fine. I’ve stumbled into a few things that haven’t actively lost money, and if pressed, I’ll admit the concept of dividends—regular payments just for owning something—is… appealing. It’s not about getting rich, it’s about avoiding complete financial ruin, and honestly, that’s a low bar.

My brother-in-law, bless his heart, is a stock picker. He’s convinced he can beat the market. He spends hours charting, analyzing, and muttering about “value traps.” I prefer something simpler. Something I can set and forget, preferably while avoiding eye contact with any financial advisor. Which brings me to ETFs. Exchange Traded Funds. Sounds terribly official, doesn’t it? Like something you’d need a passport to acquire.

I recently started looking at dividend ETFs. The idea is that you invest in a basket of companies that consistently pay out a portion of their profits. It’s not glamorous, but it’s…stable. I found one that keeps popping up: the Invesco High Yield Dividend Achievers ETF (PEY 0.21%). It sounds like a support group for overachievers, but it’s actually just a fund. A fund that, apparently, does one thing well.

It tracks the Nasdaq U.S. Dividend Achievers 50 index. Fifty companies that not only pay dividends, but have been increasing those dividends for years. It’s like they’re trying to prove something. To whom, I’m not sure. Maybe to my brother-in-law. It’s a bit like collecting porcelain dolls – a quiet, steadfast hobby that will probably outlive you.

They hold companies like LyondellBasell Industries (LYB +2.83%), which, frankly, I had to look up. Chemical companies aren’t usually on my radar. Apparently, they yield 4.11% and have been raising their dividend for twelve years. Twelve years! That’s longer than I’ve been consistently flossing. Then there’s Verizon Communications (VZ 0.11%), yielding 5.54% and raising their dividend for twenty-one years. Twenty-one years of consistent dividend growth. It’s almost… unsettling. And Robert Half (RHI 0.26%), a search firm with a 9.53% yield and, you guessed it, twenty-one years of dividend raises. It’s a little like watching a perfectly choreographed ballet of financial stability.

The index gets rebalanced quarterly and reconstituted annually, meaning they kick out the underperformers. It’s a ruthless system, but necessary, I suppose. Like weeding a garden, except the weeds are publicly traded companies.

The ETF has a distribution rate of 4.67%. Which, as far as I can tell, means it’s been paying out a decent amount to investors. Numbers are just numbers, though, aren’t they? They don’t tell you about the sleepless nights worrying about market corrections.

A Bit of Breathing Room

The main appeal, for me, is the consistently high dividend payout. But it also offers a little diversification, which is comforting. In a down market, it tends to hold up a bit better. This year, it’s up about 3%, while the S&P 500 is down 1%. It’s not a fortune, but it’s enough to buy a decent cup of coffee and a small pastry. With the dividend reinvested, it’s returned 4.7% this year, while the State Street SPDR S&P 500 ETF (SPY 0.13%) is down 0.5%.

In 2022, during that particularly unpleasant bear market, this ETF returned about 2% while the S&P 500 was down roughly 19%. That’s a significant difference. It’s not going to make you a millionaire, but it might prevent you from having to sell your grandmother’s antique teapot.

So, if you’re looking for high yields and passive income, this ETF is worth considering. Just don’t expect it to solve all your problems. And definitely don’t tell my brother-in-law. He’d never forgive me.

2026-03-12 11:04

A Bit of Breathing Room

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