There’s an entire thread on me picking stocks and a live view of the holdings I have in my stockpicking part of my portfolio* if you are interested in more details.
The TL;DR to your questions: it always depends on your personal circumstances (duh).
In my case I feel it’s worth it and it’s justified by generating passive income in the high 4 figures and closing in on 5 figures per month. If I didn’t touch my stockpicking portfolio anymore, I’d expect on average an at least 5% higher total dividend income every year (currently the rate is above 8%). As already mentioned, I find it very appealing not having to sell any equity to generate steady income (e.g. now’ish would not be my preferred time to have to sell).
Yep, full income tax payed on this (in Switzerland).
I wouldn’t park cash in this strategy unless your holding horizon is at least 3-5 years and you are willing to spend some time picking the companies.
* Use the list at best as an inspiriation, not as a buying guide. A bunch of the companies in that list are now overvalued and I wouldn’t buy them at current valuations (e.g. Coca Cola, KO) or because they haven’t increased or even cut the dividend (e.g. Compass Minerals, CME).