ever feel like your paycheck disappears before you even get a chance to enjoy it and when it comes to thinking about retirement it seems like you need a fortune just to live comfortably but here's the thing you don't need millions in investment to surpass your current job today I'm going to show you how investing $120 a week into SCD could not only solve your paycheck struggles but also set you up for retirement I'll explain how it can snowball into a portfolio value of over $2 million and in the end I'll show you how $120 a week can help you achieve annual dividend earnings of over $180,000 which translates to a monthly income of over $15,000 first things first what exactly is SCD Schwab us dividend Equity ETF or SD was launched in 2011 and since then it has become one of the most popular dividend focused ETFs available with a focus on us companies that have a strong history of paying dividends SCD combines the stability of large well-established companies with the potential for long-term capital gains this ETF is designed to track the Dow Jones US dividend 100 index which selects its Holdings based on strict criteria SCD is all about combining consistent dividend income with the potential for capital appreciation it's structured to invest in companies with a strong history of paying and growing their dividends which makes it appealing for both income investors and those looking to grow their wealth over the long term what makes the ETF unique is its balanced approach to Dividend investing rather than focusing solely on high dividend yields which can sometimes come with higher risk it emphasizes quality the fund includes companies that are not only paying dividends but are also financially healthy and have a strong track record of increasing dividends over time this focus on quality ensures that investors are not exposed to the riskier or high yield dividend stocks that might cut dividends during difficult times you might be wondering how does SCD decide which companies to include well it all comes down to a very deliberate selection process based on a specific set of criteria CHD follows the Dow Jones US dividend 100 index which ranks companies based on their Financial Health dividend yield and dividend growth to be included in the index companies must meet three requirements first companies must have a history of paying dividends for at least 10 consecutive years this makes sure that only companies with a strong commitment to returning Capital to shareholders are included secondly dividend growth Beyond just paying dividends companies must also show a history of growing their div dividends over time this is crucial because it shows that the companies are not only able to pay dividends but are also increasing those payments as their businesses grow lastly their financial strength companies are evaluated based on financial metric such as return on equity and free cash flow ensuring that only financially strong companies are included in the fund when you invest in SCD you're investing in a diversified portfolio of 100 highquality US companies across various sectors the Holdings are spread across Industries like financials healthc care consumer staples and Technology this diversification is key because it reduces your exposure to any single sector providing a cushion against downturns in specific Industries some of the top Holdings include well-known companies like the Home Depot Black Rock Cisco Systems locked Martin Corporation fizer Verizon communications and Texas Instruments these are large established companies with a strong track record of paying and growing dividends for example the Home Depot is one of the largest Home Improvement retailers in the world and it has 32 years of History increasing their dividends fiser a leading pharmaceutical company is another notable holding that provides a stable source of income for investors Texas Instruments known for its leadership and semiconductor technology is also a top holding offering both growth potential and reliable dividends SD's Holdings are carefully selected to balance stability and growth by investing in companies across various sectors the fund minimizes risk while providing exposure to companies with strong dividend growth possibilities speaking of growth let's see where SCD has been performance-wise one of the most compelling reasons to invest in CHD is its strong historical performance since its Inception in 2011 the ETF has consistently delivered solid returns both in capital appreciation and dividend income let's compare it with a broader index like the S&P 500 if you're wondering how it Stacks up in terms of performance and income potential over the past 10 years SCD has provided a price return of over 120% while this may not be as high as the S&P 500 which returned around 200% over the same period SCD offers the added benefit of a higher dividend yield this makes it particularly attractive for income investors who are looking for a steady stream of income while also growing their Capital SD's dividend growth has been equally impressive the fund's dividend yield currently stands at around 3. 41% and its 5-year dividend growth rate or cagr is 12% this means that not only are you receiving a healthy dividend yield but those Dividends are also growing at a significant rate over time in terms of overall performance perance SCD has proven itself to be a reliable choice for long-term investors while it may not offer the same level of capital appreciation as the S&P 500 its combination of dividend income and growth potential makes it a solid option for those looking to build wealth steadily but does it have what it takes to hit a six-figure valuation that's what we'll see in the end and also I'll show you how it can turn a $120 per week investment into a portfolio that pay pays over $180,000 in annual dividends one of the key factors contributing to SCD strong performance is its focus on high quality dividend paying companies these companies tend to be more stable and financially healthy which helps protect against downside risk during Market volatility this brings us to the risk profile of the ETF SCD has a relatively low expense ratio of . 6% which helps enhance overall market returns by reducing costs moreover its volatility measured by the beta is lower than that of the broader Market this means SCD tends to experience smaller price swings compared to the overall Market making it a less risky investment option SD is currently priced at $285 per share and don't be afraid the stock price didn't plummet they recently executed a 3 for one stock split which took effect this October the split resulted in a price per share adjusting to approximately $28.
33 from a pre-split price of around $852 however it's important to note that such a split doesn't alter the total value of investors Holdings but rather increases the number of shares each investor holds making the shares appear more affordable without changing the fundamental value of the investment the ETF has a price to earnings ratio of 5 . 42 and a PB ratio of 2.
