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The fear of losing hard-earned money can paralyze many investors, leading them to keep their savings in cash or low-yield accounts. While this approach feels safe for them, it often results in missed opportunities for growth, especially in an era when the value of cash diminishes over time.

The potential rewards of investing, such as passive income through dividends, can be life-changing for those brave enough to throw their money into the game.

This brings us to the story of an investor taking the leap despite his fears. The individual, a Reddit member in the r/Dividends community, shared his concerns on the online discussion forum, seeking advice on allocating his $265,000 to generate significant dividend yields within just three years.

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As he explains, “I’m finally forcing myself to overcome my intense fears, and I’m beginning to invest. I’d like to pull dividends at the end of the three years.”

His goal is clear: to grow his wealth through dividend-paying stocks while minimizing risks. However, he’s also aware of market volatility and the relatively short investment horizon.

But Reddit has delivered advice for the investor. Let’s break down the users' most relevant and common suggestions.

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Where to Put $265,000 to Generate Dividends in 3 Years? Reddit Advises

Consider Low-Risk, Income-Focused Investments

Redditors mentioned several low-risk, income-paying holdings as ideal investments for the poster given the short time horizon and his fear of losing his money.

“[iShares 0-3 Month Treasury Bond ETF (NYSE: SGOV)]/ [high-yield savings account] if you need it in 3 years. If you need it in, let's say, 7 years, I'd go [Schwab U.S. Dividend Equity ETF (NYSE: SCHD)]/ [iShares Core Dividend Growth ETF (NYSE: DGRO)]/ [Fidelity High Dividend ETF (NYSE: FDVV)] combo,” recommends a Reddit user.

One commenter suggested the poster a blend between low-risk and moderate-risk strategies.

“Dividend funds that could help if you really want to receive dividends overgrowth could be [Vanguard High Dividend Yield ETF (NYSE: VYM)], SCHD and you could pair one of them with [Vanguard Dividend Appreciation ETF (NYSE: VIG)]. If it's me and I really need to do something besides SGOV, but don't want to risk too much would be. 90% SGOV, 10% [Vanguard Total Stock Market ETF (NYSE: VTI)],” he said.

Another commenter mentioned SGOV but he also recommended two higher-yielding holdings that are a bit more riskier.

“I would do a split between SGOV/[Panagram BBB-B CLO ETF (NYSE: CLOZ)]/[JPMorgan Equity Premium Income ETF (NYSE: JEPI)],” his comment reads.

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Go for High-Dividend, Growth-Focused Investments

Several Reddit users advised the investor to put his money in high-dividend shares, which are indeed riskier but offer the potential for higher returns and consistent dividend payouts.

“If you want lower risk, then as a start I would put half into a high-yield dividend index like Vanguard FTSE All-World High Dividend Yield UCITS ETF. Then, you’re quite well diversified and not fully in the U.S. market. The dividend yield is roughly 3% while retaining an average of 10% ROI per year (from the last 5 years),” a Redditor advised.

A commenter recommended a handful of individual high-dividend stocks that are known for monthly dividend payouts and resilience in the uncertainties of the market.

“I would look for growth, high dividends and something that is not too much related to the political situation. I would check [Main Street Capital Corporation (NYSE: MAIN)], [Ares Capital Corporation (NASDAQ: ARCC)], [STAG Industrial Inc. (NYSE: STAG)], [Prologis Inc. (NYSE: PLD)] – Even if they went sideways before growth continues, you will get monthly dividends that are much higher than SCHD or [Invesco NASDAQ 100 ETF (NASDAQ: QQQM)],” the Redditor wrote.

Finally, a commenter advocated for a diversified portfolio that includes dividend kings alongside other assets.

“Maybe like 10% on real estate. 10% into t-bonds. 10% into solid dividend kings. 10% into gold. 10% into 401 (k),” he said.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

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This article New Investor With $265K Faces Huge Decision: 'Which High-Dividend Stocks Will Set Me Up For Massive Payouts In Just 3 Years?' originally appeared on Benzinga.com