Six Boring Blue Chips Generate $54,000 a Year on $920,000 Without a Single 7% Yield Trap

24/7 Wall St. presents an investment strategy based on six "boring" (i.e., stable, low-volatility) blue-chip stocks to generate $54,000 in annual income from a $920,000 portfolio, without resorting to high-yield stocks (above 7%) that may be traps.

Details

The selected stocks include:

• Johnson & Johnson (JNJ) – Healthcare
• McDonald's (MCD) – Consumer Cyclical
• Procter & Gamble (PG) – Consumer Defensive
• Coca-Cola (KO) – Consumer Defensive
• PepsiCo (PEP) – Consumer Defensive

These stocks were chosen because they offer relatively stable dividend yields (below 7%) with reliable earnings growth, reducing the risk of dividend cuts. The portfolio's average yield is approximately 5.87%, sufficient to achieve the target income.

Context

This strategy comes at a time when investors seek steady income in a low-interest-rate environment. High yields (above 7%) may tempt investors but often signal higher risks, such as unsustainable payouts or deteriorating company fundamentals.

What It Means for Investors

The strategy suggests that achieving reasonable income from stable blue-chip stocks is possible without taking excessive risk. However, investors should assess their risk tolerance and investment goals before adopting any strategy.