A friend asked me the other day, how much would I have to invest to get a dividend payment of 1000$ monthly. My friend is particularly interested in REITs (Real Estate Investment Trusts), and I personally own some O, Realty Income Corp, shares. I did a little math with O and came up with the figure 226,700 (approximately) dollars. The annual dividend of O is 2.8$/share, paid monthly (.23$ monthly, I rounded it to .25$/share to make my math easier) right now, and the cost is 56.68$.
But my friend isn't going to drop 226,700$ on anything, right now. He's (hypothetically) going to do it incrementally over time. Now I understand most of the forces at work in this question, and the moving parts that make it change over time, but the truth is I don't have the math chops to crunch the numbers (or even begin to build an equation) that would answer it. Let's say for argument's sake that, starting right now, and for the foreseeable future, the price and dividend growth remains the same and he buys 200$/month, as well as reinvesting the dividends, how long does it take to get to a 1,000 monthly dividend?
PS. I've separately figured that O enjoys a yearly average dividend increase of around .01$/month (1 cent a month), or .12$ annual dividend (12 cents for the year).
PPS. Please feel free to round responsibly. I'm looking for a rough, but digestible answer here, not an exact one.