Somebody left a comment on my channel last month that was better than most of my videos.
Buried in a reply with eight likes, it said: "Your first goal in SCHD isn't a dollar amount. It's thirty-six shares. Because at thirty-six shares, the dividend pays for one more share every year. The thing starts buying itself."
I read that, and I first thought, that's an interesting way to think about it. And second, is that actually true? So I ran the numbers, and he's right. He's a little bit more than right, and we'll get to that.
It got me thinking. I always talk about my share count. But there are levels way below mine that actually matter, and I've never walked you through a single one. So today we're going over the levels of SCHD, and I want you to figure out which level you're on by the end.
The Math Behind Level One
Here's the part I want you to take from this post, even if you skim the rest. The number of shares you need for the dividend to buy you one more share a year isn't a SCHD thing. It's a math thing: one number divided by another.
So how many shares does it take? Take a hundred, divide by the yield. Done.
At three percent it's thirty-four shares. At four percent, twenty-five. At ten percent, ten.
Run it on SCHD right now, and the honest answer is thirty-four shares. Not thirty-six. He wasn't wrong, he was conservative. Thirty-six clears the bar with a little room left over. Thirty-four is the actual line. And it could even be thirty-three, depending on where the price sits the day you check. The share price changes every day, and so does the exact number.
Level One: Thirty-Four Shares
Now, is one free share a year going to change your life? Absolutely not.
That's not the point. Everyone reading this started with zero shares of SCHD. Me included. This is not a competition with others. We're here to keep learning and growing our investments.
Thirty-four shares is where the math flips from you feeding it to it feeding itself. It's small. It's also the only level most people can reach in about a month. Right now, there are people reading this at ten shares, forty-six, a hundred and fifty. Every one of them is closer to that flip than they think.
Level Two: One Hundred Shares
A hundred is where you stop being a guy who owns some SCHD and start being a guy with a position. It's the first number where the quarterly dividend notification on your phone might start getting your attention.
Let's be honest with ourselves: at a hundred shares, that dividend doesn't cover any bills. But there is something about getting to three digits of a stock that makes it feel significant. And investing can be emotional sometimes. Embrace your success at this level and start working toward the next.
Level Three: Five Hundred Shares
Nobody accidentally ends up with five hundred shares. That one takes a plan and about two years of buying when you don't feel like it.
It's also where the dividend starts covering something real. Okay, not a mortgage — something small and specific like your water bill, Netflix, or Apple Music. The kind of thing where you point at one recurring cost and say, that's handled now, and I didn't do anything this quarter.
Now, you're probably not taking those dividends out to pay those bills, because you're reinvesting them so you can get to the next level. That's the turn. It's not the amount. It's that a bill in your life now has a source that isn't your labor. And it feels really good.
Level Four: One Thousand Shares
A thousand is where this stops feeling like something you're messing around with and starts feeling like a real part of your money. There's no announcement. You just look one day, and it's four digits.
Here's what it actually is: the level where the annual dividend crosses into four figures. That's the year your money worked the night shift while you were home asleep, collecting the paycheck.
And the part nobody says out loud: at a thousand shares, the dividend is buying you roughly thirty new shares a year by itself. You've gone from it buying you one share a year to it buying you almost an entire Level One. Are you starting to see the trend?
The Levels Aren't Fixed
Now I have to be straight with you about this, because if I skip it, this whole post is a feel-good lie. These levels aren't fixed. They move. And this year they moved up.
SCHD has had a genuinely great year on price. If you already owned it, congratulations. So did I, and I'm not complaining.
But here's the mechanic. Level One is a hundred divided by the yield. Yield is the dividend divided by the price. So when the price climbs and the dividend doesn't climb as fast, the yield drops, and the shares you need go up.
Earlier this year Level One was around thirty shares. Today it's thirty-four. Same fund, same goal, about four more shares to get there.
I'm not raining on the 2026 SCHD parade. A price run-up is a good problem, and if you're holding, you're up. But if you're still buying — and most of you are, me included — a great year for the price is a slightly worse year for the entry. Both are true at once. Most videos only tell you the first one.
The Part About Dividend Growth
One more thing while I'm being honest. SCHD's dividend growth has cooled. Over the last decade, SCHD raised its payout at a pace that made this whole strategy famous. Over the last year, that increase was small. I wrote a whole post on exactly that.
That doesn't break it for me. I bought this Friday like almost every other Friday. Big funds are just harder to grow. That's normal, not a warning sign. And one slow year doesn't tell you much, but I want you to know we need to keep an eye on this as SCHD investors.
Because if you built your plan on the ten-year growth rate and the next ten look like the last one, getting to your next level takes longer than your spreadsheet says. Build in the slack.
Level Five: Where I Actually Am
Two thousand four hundred and ninety-nine shares. And yes, one share from twenty-five hundred. I'm not buying one share early just to say a round number. It'll get there Friday if I decide to buy SCHD this week.
Look, I know that it's not enough for retirement. That's not me quitting anything. I think I'm working harder than ever because I'm starting to see the light, and I'm trying to get there as fast as possible.
That's three and a half years of buying SCHD a few times a month without missing one, and it produces a real quarterly payment that doesn't replace a paycheck — I showed exactly what that position pays in an earlier post.
And I'm going to make a new levels post next year with a raised top level. Because I'm always trying to level up everything in my life, and if you're reading something like this, I know you are too.
What About a Thousand Dollars a Month?
That brings me to the question I get more than any other. What about a thousand a month?
Let's run the formula backward. Twelve thousand a year, divided by the annual dividend per share. As of today, that's somewhere around 11,429 shares, with a cost close to four hundred thousand dollars.
That's not discouragement, that's a map. Because here's what people do with that number — they look at it, decide it's impossible, and quit before Level One.
The guy in my comments at twelve thousand shares, sixty-nine years old, still adding? He was probably smarter than me and started investing at a younger age, which is something I hope you do too.
What Actually Moves You Up a Level
Two things, and neither is picking a better fund.
One: reinvesting. The dividend buys shares, those shares pay dividends, and it moves you up while you sleep. Slowly. Boringly. Least exciting sentence in investing and the only one that's undefeated.
Two: showing up on a schedule you don't renegotiate. In my comments, there's a guy buying every trading day. Another one every Monday. Another every Friday. None of them are timing anything. They just don't skip.
That's the entire level-up engine. Worrying about the day-to-day price is just noise.
So What Level Are You On?
Here's what I want from you. Go find out what level you're on. Not your dollar amount — your share count. If you're under thirty-four, your only job is Level One. If you're past a thousand, you already know the next one.
Then tell me what level you're on in the comments on the video. Just the number. Every time I post, people put their share counts down there, and it's become the best part of my comment section.
And if that thousand-a-month number is stuck in your head, I put the other side of the story in my post on hitting a thousand a month in dividends. Read that one next.
Watch the full video above, or on YouTube: https://youtu.be/hasms3By6pA
