Want to Generate Thousands of Dollars in Passive Income While Barely Lifting a Finger? This Dividend ETF Could Get You There.

A $50,000 investment in the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) would generate around $850 in annual dividend income at its recent share price and current yield. Here's where things get even more interesting. This dividend ETF has grown its payout at a 7.3% compound annual rate over the last decade. If it maintains that pace, it would generate over $3,500 a year in annual dividend income in two decades, all without lifting a finger or adding another dollar to your investment.

Here's a closer look at this fund, which makes it easy to collect passive dividend income.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Built to easily invest in dividend growth stocks

The Vanguard Dividend Appreciation ETF is the largest dividend-focused ETF by assets under management at over $111 billion. The reason so many investors trust this fund for their dividend income needs is its simple strategy. The ETF passively tracks the S&P U.S. Dividend Growers Index , which holds U.S. stocks that have increased their dividends for at least 10 consecutive years. It excludes REITs (which pay non-qualified dividends) and the top 25% of companies by dividend yield (to avoid potential yield traps).

It currently holds 333 stocks with strong records of dividend growth that should continue. It weights its holdings by market cap, so the largest companies rank highest. Its top three holdings are large tech companies. While they all have lower dividend yields, they have strong records of dividend growth. What's nice about this fund is that you don't need to hunt for dividend growth stocks and actively manage a portfolio. You just buy this fund and let it do all the work.

Unlike some dividend ETFs, VIG doesn't have a particularly high current yield. It has a 1.7% yield if you annualize the last dividend payment and divide it by the ETF's recent share price, which is higher than the S&P 500 's yield of roughly 1.1%. At VIG's current yield, every $10,000 invested into the ETF would generate around $170 of annual dividend income. However, because this fund focuses on dividend-growth stocks, its income should steadily rise. The annual dividend income would more than quadruple over two decades if the ETF continues to grow its payout at a compound annual rate of over 7%.