pathdoc / Shutterstock
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
What’s the key to building a successful portfolio? One Redditor who shared their journey to a $2 million portfolio claims the secret is simple: dividends.
What were their core dividend choices, and what alternative strategies can investors use to diversify and protect against market volatility?
The Reddit user from the r/Dividends community detailed how they reinvested dividend income consistently into two ETFs: SCHD (Schwab U.S. Dividend Equity ETF) and DIVO (Amplify CWP Enhanced Dividend Income ETF). They took what appears to be a disciplined, long-term approach that has already helped them build a substantial $2 million portfolio.
Their strategy underscores the importance of consistency, but there are risks to their approach. While so far effective, it’s highly vulnerable to stock market swings.
Here are some key takeaways from the Reddit poster’s strategy — plus some alternatives to stock market to consider for your own portfolio.
Although the investments in their portfolio are each made up of hundreds of other investments, this doesn’t guarantee diversification in the grand scheme of things.
-
SCHD: Known for its mix of high-quality, high-yield U.S. stocks, SCHD has a solid track record of dividend growth, offering income and potential for capital appreciation.
-
DIVO: This ETF focuses on income generation through dividend-paying stocks, combined with a covered call strategy, making it a reliable option for higher yields without excessive risk.
For those drawn to a dividend-focused strategy, platforms like Public make it easy to invest in dividend stocks and ETFs.
Public not only offers commission-free trading but also provides a high-yield account where you can park your cash between investments. Public also has social features, enabling users to follow and learn from other investors, share ideas, and [stay updated on market trends with real-time insights] — kind of like its own internal Reddit community.
And while community forums and friends are great sources for new ideas and launch pads, you shouldn’t take investing advice from just anyone.
That’s why the team of former hedge fund analysts at Moby, an investment research platform providing individual stock picks, is the better choice for your stock market insights.
The platform has already helped over five million users uncover stocks before they deliver multibagger returns.
Moby’s success speaks for itself. The platform’s stock picks have outperformed the S&P 500 index by an average of 11.95% over the past four years. And that’s on top of the S&P’s already consistent annualized returns — about 10% a year, on average, since the index’s 1957 inception.
Insights from Moby can help guide your decisions, whether you’re a beginner or scaling your portfolio. Moby gives you access to extensive research, broken down into simple, easy-to-understand formats.
ETFs, like those the Reddit investor chose, are good for diversification because they tap into multiple industries and geographies. But diversification works best when your assets aren’t just spread across stocks — you may also want to consider leveraging multiple asset classes.
Investors might be tempted to rely on dividend-paying stocks for passive income, but real estate can offer similar benefits. You don’t need to own property to earn rental income either, which is good news given rising home prices have priced out many first-time buyers. With the median home price climbing sitting at $410,800 in Q2 2025, and mortgage rates doubling from where they were five years ago, alternative ways to invest in property have become more appealing.
If you aren’t ready to jump into home ownership (financially or otherwise), there are platforms like Arrived that let you buy stakes in rental properties, earn dividends, and skip the responsibilities of property management.
Backed by world class investors like Jeff Bezos, Arrived’s easy-to-use platform offers SEC-qualified investments such as rental homes and vacation rentals for as little as $100.
Their flexible investment options allow both accredited and non-accredited investors to benefit from this inflation-hedging asset class with ease. You start by browsing vetted properties, then you simply select a property and choose the number of shares to buy.
Homeshares is changing the game by allowing accredited investors to gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning, or managing property.
The fund focuses on homes with substantial equity, utilizing Home Equity Agreements (HEAs) to help homeowners access liquidity without incurring debt or additional interest payments.
This approach provides an effective, hands-off way to invest in high-quality residential properties, plus the added benefit of diversification across various regional markets – with a minimum investment of $25,000.
With risk-adjusted target returns ranging from 14% to 17%, the U.S. Home Equity Fund could unlock lucrative real estate opportunities, offering accredited investors a low-maintenance alternative to traditional property ownership.
And you aren’t limited to residential opportunities, especially if you are an accredited investor.
Read more: US car insurance costs have surged 50% from 2020 to 2024 — this simple 2-minute check could put hundreds back in your pocket
For example, First National Realty Partners (FNRP) focuses on grocery-anchored commercial real estate, leasing to major essential-needs retailers such as Walmart and Whole Foods. This sector can offer more stability, especially during economic downturns, making it a good option to add security to your portfolio.
As a private equity firm, FNRP provides insights into the best properties both on and off-market.handles all the deal details, so you can invest passively and potentially collect distribution income — just like a dividend.
Investors can research FNRP’s offerings at their convenience, request and execute investment documents and then track and manage the progress of their investments through their personalized and secure platform.
Besides real estate, there are other creative ways to diversify your alternative investments, such as fine art.
Historically, art has performed well during economic downturns, acting as yet another hedge against stock market volatility. The Fine Art Group, a global advisory and art finance firm, reports a 14% return on its assets, outperforming the S&P 500’s annualized return of 11.88%.
One company is looking to make art investing accessible to more accredited and non-accredited investors: Masterworks.
Here’s how it works: Instead of spending millions on a single painting at auction, investors can now purchase fractional shares of blue-chip art by renowned artists including Pablo Picasso, Jean-Michel Basquiat, and Banksy.
Simply browse their impressive portfolio of paintings and choose how many shares you’d like to buy. Masterworks will handle all the details, making high-end art investments both accessible and effortless. When the firm sells a piece you’ve invested in, you get a return from any net proceeds.
Once you join the Masterworks community of more than 60,000 investors, you can tap into a whole lot of data and insights and use them as a guide when choosing the art you want to invest in.
The Redditor’s journey to $2 million highlights the power of strategic investing and reinvestment. While dividend stocks and ETFs are excellent for generating passive income, broadening your approach with alternative sources can help create a more balanced and resilient portfolio. There are plenty of ways to build a strong investment strategy, but make sure it’s achieving what you want, rather than just following what another Redditor has in mind.
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Disclaimer: This news has been automatically collected from the source link above. Our website does not create, edit, or publish the content. All information, statements, and opinions expressed belong solely to the original publisher. We are not responsible or liable for the accuracy, reliability, or completeness of any news, nor for any statements, views, or claims made in the content. All rights remain with the respective source.