Buy stock with good dividends.
Realty Income, stock symbol O
I s a great one with monthly dividends of .257/share at a current price of $54.20/share
5000 shares cost $271,000 will produce a passive monthly income of $1,285.
Dividends are just part of the picture.
“Good dividends” are ones the company can support - while growing the business and maintaining or expanding shareholder equity.
Lots of high dividend payers out there paying 8-10%+ - but they are doing so while killing the shareholder equity/share price.
Take a stock like BPT - years ago my old man loved this royalty trust - it paid big dividends as oil prices soared and we were pumping more and more out of Alaska. But like all oil/gas fields - its production dropped and as a result so did the dividends and share price.
Real estate / REITs are tricky - you have some like Iron Mountain IRM - sporting a 3% dividend while share prices spike of late. Then you have things like Vornado - paying almost 5% - but if you bought even at this years 52 week high (which is well below the all time highs) - it would still take you the next half decade to get back to even assuming the stock price remains constant with the present dividend.
It sounds so tempting - just putting all your money in a select few stocks/sectors and living on the dividends. Plenty of people did it for years on things like T or XOM - but you need to stick to a mix of companies who have solid management and can keep the cash flow larger than their dividend. Remember - there are people out there who are big holders of their own stock and pay that dividend just to cash out their equity - while not yielding control of their companies.