Here's How Many Shares of the Vanguard Total Stock Market ETF (VTI) You'd Need for $500 in Yearly Dividends

Many people think being a successful investor involves picking individual winners, but it can be as simple as investing in broad exchange-traded funds (ETFs) that contain hundreds or thousands of companies. One great option is the Vanguard Total Stock Market ETF (NYSEMKT: VTI), which offers instant diversification across the entire U.S. market.

Investing in VTI is more than just banking on stock price growth, too. It also pays a dividend that can be a reliable income source for investors. As an ETF, VTI's dividend payouts aren't as straightforward as regular stocks. They vary from quarter to quarter. However, the ETF's average yield over the past 12 months is 1.24%, meaning that if you wanted to receive $500 in yearly dividends, you'd need to purchase around 124 VTI shares at its current price of $327 (as of Nov. 19).

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As the name suggests, VTI does a great job covering virtually all aspects of the stock market. Like many market-cap-weighted ETFs, VTI leans heavily toward the tech sector, but it still contains companies from every other major sector. And unlike indexes like the S&P 500, which contain only large-cap stocks, VTI includes large-, mid-, and small-cap companies.

VTI isn't a pure-play dividend ETF, but it's a great mix of marketwide exposure, long-term growth potential, and a dividend yield that rivals that of an S&P 500 ETF.

Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.