I will be leaving my place of employment in the near future to run and grow my small business full-time. After assessing my expenses I'm expecting to be in the red $300-$400 a month for the next 1-2 years. Personally, I'd rather not see my net income every month as negative so I'm considering investing in some dividend paying stocks to supplement my income for the next 1-3 years.
I have $50k~ I'd feel comfortable investing that is currently sitting in a standard savings account. I plan to spread this out over a few dependable high dividend yielding stocks, but for this example I'll be using AT&T. As of this post AT&T is valued at $34.29 a share with a quarterly dividend of 0.47. Doing some quick math that would leave me with 1,458 shares averaging $228 a month in dividend payments before taxes. This would ease some of my concern with not generating a positive income for the next few years.
To answer some of your questions, I'm 26 years old, I have zero debt, 80k~ in a standard savings account, 25k~ in a 401k, 15K~ in stock, and I do not own a home.
My question is, what are some of the risks associated with investing in dividend paying stocks solely to supplement my income for the next 1-3 years, besides the usual risks of entering the stock market? Are there any investment alternatives I should be considering that would generate a similar monthly/yearly income? Am I just going about this all wrong?