Want Decades of Passive Income? Buy This Index Fund in 2026 and Hold It Forever.

Core Viewpoint - Dividend-paying stocks and dividend-focused ETFs provide a reliable source of passive income while allowing for capital appreciation over time [2][3]. Group 1: Dividend Income - Various forms of passive income include interest from deposits, rent from tenants, and annuity payments, with dividend income from stocks being particularly favored [1]. - Dividend-paying stocks allow investors to earn income without selling shares, and the value of shares and dividends typically increases over time [2]. Group 2: Schwab U.S. Dividend Equity ETF - The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 Index, focusing on high-dividend-yielding stocks with a history of consistent dividend payments [3]. - The ETF has a yield of 3.8% and impressive average annual returns over various periods: 9.45% over 5 years, 12.86% over 10 years, and 12.30% over 15 years [3]. - Compared to the Vanguard S&P 500 ETF, which has a lower yield of 1.1% and higher concentration in tech stocks, the Schwab ETF offers a more balanced approach with only 9% in tech [3][5]. Group 3: Market Dynamics - The S&P 500's heavy weighting in technology stocks has historically benefited it, but this concentration may lead to greater volatility during market pullbacks [5][6]. - In the event of a market downturn, the Schwab U.S. Dividend Equity ETF is expected to perform better due to its diversified holdings and lower exposure to tech stocks [6].