For many investors, dividend-focused stocks and funds provide a way to generate passive income, whether to supplement retirement, cover day-to-day expenses, or even finance small luxuries like annual vacations.

While some aim for significant dividend payouts to replace their salary, others are happy with modest but constant returns that offer a little extra financial freedom.

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This is the case of a Reddit user who is exploring this approach. With $30,000 to invest, he's seeking long-term dividend stocks that can grow over the next 20 years until retirement. While he already holds dividend-paying stocks like Apple (NASDAQ:AAPL) and Walt Disney  (NYSE:DIS), he wants to expand his portfolio for stability and future income, even if it's just enough to cover yearly vacations.

“I currently have some stocks that give out dividends (Apple, Disney) but I’m looking for others. Long-term stability, that my wife and I can use the dividends as another form of income say in 20 years. Even if it’s just enough to pay for a yearly vacation here or there. Any thoughts on good companies to choose from?” he asked.

Let’s break down the Redditors’ advice received in the comment section.

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Where to Invest $30,000 to Generate Enough Income to Cover Yearly Vacations? Reddit Answers

Put the Money in an ETF

Several commenters recommended Schwab U.S. Dividend Equity ETF (NYSE:SCHD) as a core holding because of its dividend yield, historical growth, and the low-risk, diversified exposure it offers investors.

“Go all in SCHD. Low risk, nice 3.5% starting yield and it will just keep growing,” a commenter said.

Reinforcing the idea that SCHD fits the poster’s long-term stability and dividend payout need, this Redditor also suggested he goes with SCHD: “Since you want some growth and decent payout, SCHD is a great option. 3.5% dividends and 11% growth over the last 10 years each year.”

“I would stick with S&P 500 ETFs being young. Put it in a self-direct investment retirement account to avoid taxes,” a comment reads.

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Consider High-Yield Dividend Stocks and Trusts

Several commenters suggested higher-yield assets that would generate higher payouts for the investor in the long run.

“If you want higher yield stocks check: [Verizon Communications (NYSE: VZ)], [AT&T (NYSE: T)], [Realty Income Corporation (NYSE: O)], [Altria Group (NYSE: MO)], [British American Tobacco (NYSE: BTI)],” a Redditor recommended.

A commenter mentioned United Parcel Service (NYSE:UPS) as a great pick since the company seems to start focusing on higher profit margin areas.

“UPS pays a solid dividend and the share price has been beaten down a lot on the news that they are reducing Amazon deliveries to focus on higher profit margin areas,” he said.

Suggesting a very detailed portfolio allocation, this Redditor mentioned several ETFs and individual stocks that he considers would help the poster reach his dividend and growth goals.

“[Vanguard S&P 500 ETF (NYSE: VOO)] $5,000, 1.25% dividends. Do [dividend reinvestment plan] SCHD $5,000, 3.5% dividends. Do [dividend reinvestment plan], [JPMorgan Equity Premium Income ETF (NYSE: JEPI)], [JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ)​] ($5,000), 8% combined dividends. Do [dividend reinvestment plan] [Old Republic International Corporation (NYSE: ORI)] $2,000, 3% dividends. Do [dividend reinvestment plan] [Waste Management (NYSE: WM)] and [Automatic Data Processing (NASDAQ: ADP)] ($3,000), 2% average dividend. Do [dividend reinvestment plan] [Pfizer (NYSE: PFE)] and [Johnson & Johnson (NYSE: JNJ)] $2,000, 4.75% average dividend. Do [dividend reinvestment plan] [JPMorgan Chase & Co. (NYSE: JPM)] and [UnitedHealth Group Incorporated (NYSE: UNH)] $2,000, 2% average dividends. Do [dividend reinvestment plan] AAPL and [Microsoft (NASDAQ: MSFT)] $2,000. [The Coca-Cola Company (NYSE: KO)] and MO $2,000, 5% average dividends. Do [dividend reinvestment plan] JPM or [American Express (NYSE: AXP)] $2,000. JPM has good potential growth,” the suggestion says.

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This article Man With $30K To Deploy Wants Dividends For Life – 'Even If It's Just Enough To Pay For A Yearly Vacation Here Or There,' Reddit Reacts originally appeared on Benzinga.com

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