It would be an impressive feat to generate $4,000 in yearly passive income with just $12,500 in your account. Yet, it’s actually possible if you invest $2,500 into five carefully chosen stocks or exchange traded funds (ETFs).
Not only that, but you could get paid cash distributions every month and possibly even every week. The plan is to own high-yield stocks that represent profitable businesses which pay monthly dividends. Also, you can own some ETFs offering big yields and frequent cash payouts.
Allocating $2,500 toward the five assets on today’s list means you’d be investing $12,500 in total. It’s possible to earn $4,000 per year in dividends/distributions is you achieve an average yield of at least $4,000 / $12,500 or 32%.
Sure, that’s ambitious and these five stocks/ETFs carry some risk; for example, any of the annual yields might get cut. On the other hand, you could become a passive income overachiever simply by holding five assets, so let’s start off with two high-paying stock picks.
Oxford Square Capital Corp. (OXSQ)
We’ll begin with Oxford Square Capital Corp. (NASDAQ:OXSQ), a business development company mainly specializing in bank loans and collateralized loan obligations (CLOs). Since Oxford Square Capital Corp. sends out its cash dividends on a monthly basis, you can take advantage of frequent reinvestment and compounding opportunities.
It’s smart to focus on income-positive businesses in order to mitigate your overall risk level. As it turns out, Oxford Square Capital Corp. is income-positive as it reported roughly $5.56 million of third-quarter 2025 net investment income.
At the moment, Oxford Square Capital Corp. offers a 22.46% forward annual dividend yield. This doesn’t measure up to our objective of achieving an average yield of at least 32%. Nevertheless, buying $2,500 worth of OXSQ stock is a good start as we’ll raise the average yield later with some mega-yield ETFs.
Orchid Island Capital (ORC)
Another stock you could invest $2,500 into is Orchid Island Capital (NYSE:ORC). This company is a real estate investment trust (REIT) that concentrates on U.S.-based residential mortgage-backed securities.
Like Oxford Square Capital Corp., Orchid Island Capital pays dividends every month. Furthermore, Orchid Island Capital is a profitable business enterprise, having recorded $72.08 million in Q3 2025 net income. Being income-positive implies, more or less, that these companies should be able to continue paying monthly cash dividends.
Currently, Orchid Island Capital stock investors can expect a 20.14% forward annual dividend yield. We’re still below our 32% average yield target, but there’s no need to fret as I’ve got a three-pack of ETFs that could bring massive payouts.
Level Up With AMZW, TSLW, and AVGW
To raise the bar in terms of overall annual yield, you could invest $2,500 into three funds from Roundhill. These ETFs all pay distributions on a weekly basis, so you can continue to receive cash payments every month or even more often than that.
To provide a simplified explanation, the following Roundhill ETFs trade shares of a well-known stock as well as a type of derivatives known as swaps. This typically raises the risk level but also enables substantial income-generation opportunities.
First, we have the Roundhill AMZN WeeklyPay ETF (CBOE:AMZW), which trades shares and swaps to indirectly extract income from Amazon (NASDAQ:AMZN) stock. Unlike a direct investment in Amazon stock, you’ll receive weekly cash distributions if you hold AMZW shares.
Clarifying the fund’s objective, Roundhill explains that the AMZW ETF targets “enhanced returns corresponding to 120% of” the weekly performance of AMZN stock. The expected annual distribution rate of the Roundhill AMZN WeeklyPay ETF is quite hefty at 37.57%.
Next up is the Roundhill TSLA WeeklyPay ETF (CBOE:TSLW), which uses similar trading strategies to indirectly derive income from Tesla (NASDAQ:TSLA) stock. In particular, the TSLW ETF aims for “enhanced returns corresponding to 120% of” the weekly performance of TSLA stock.
There’s risk involved as the share price of the Roundhill TSLA WeeklyPay ETF may be volatile. However, it’s hard to resist the fund’s massive 53.28% annual distribution rate, no doubt.
Then there’s the Roundhill AVGO WeeklyPay ETF (CBOE:AVGW), which attempts to achieve similar results with Broadcom (NASDAQ:AVGO) stock. Again, the share-price volatility risk shouldn’t be overlooked, but the AVGW ETF’s gigantic 54.68% distribution rate makes it a worthwhile addition to this list.
Putting It All Together
So, have we reached or objective of a 32% or higher average annual yield? To fond out, we just need to add up the expected yields of OXSQ, ORC, AMZW, TSLW, and AVGW and then divide the total by five.
The result is a 37.63% average annual yield between these five stocks/ETFs. Thus, we’ve put together a plan to earn at least $4,000 per year in dividends/distributions (assuming there are no yield cuts) with monthly or even weekly cash payments to your account.
