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In the last video we went over Fixed Income Investing and why they are a staple for every portfolio with guaranteed profits.
Today we are going to dive into the real profit-making engine of portfolios.
Or also fondly known as – Passive Income Investing!
These are my absolute favs and I can’t wait to show you why.
In today’s video, I’ll show you how to start investing with Dividends. How they work and why they are the best tool for passive generating income and long term investing. Plus the most fun out of all investing tools for making money a steady income safely.
Hey, ladies, welcome back, I`m Marina, the trader chick. In the last two videos, we learned that for every 1000 dollars you invest in the bank, you earn at most one dollar per year. And we learned that if you invest in fixed income bonds and Treasury bonds or corporate bonds, you could earn 20, 30 or 40 or even more times than that you would in the bank.
Today, I’m going to share with you the second tip for how to invest safely, securely, and profitably. My favorite dividends today. I’m going to show you all you need to know about how to start investing with dividends and how you can join the Passive Income Investors Club.
So what are dividends? Plain and simple, a dividend is a portion of the profits of the company that they pay you when you invest with them. OK, so let’s say you found a company that you love.
Now let’s let’s say that the company’s share price is twenty dollars, and they offer a one dollar dividend per year per share. So that number never changes. That will not change until the board of directors decides to change it. And you will have plenty of notice of that change.
You don’t have to worry about it until you get some notice. So let’s say so. So when you buy your share, it’s 20 dollars and the price of the dividend is one dollar. Normally the dividend gets split up either one time of year, but usually, I’d say the majority is every three months. Some companies will pay once per month, but it’s a bear.
It’s rarely ever like that. That one dollar gets split up into, let’s say, four payments. You’ll get 25 cents per share every three months if that’s the way the company pays the share. This is the dividend. Normally, the way you would hear people talk about dividends is through dividend yield.
Related Read: Different Types of Investment
Let’s say this stuff that you bought is 20 dollars, and you get one dollar dividend. That means your dividend yield is 5 percent. So I have a couple of rules of thumb is for the dividend yield.
First of all, the dividend yield goes up and down. It fluctuates with the price of the share. So if the share goes up in price, the dividend yield goes down. If the share goes down in price, the dividend yield goes up. I tend to look at the actual dividend price, but sometimes I will look at the dividend yield, simply because you don’t want it to be too high.
If it’s around 6, 7, 4, 8 percent or higher, you really need to do your due diligence because now you’re getting into the more aggressive type of stocks and bonds, which is fine if you want to be more hands-on. But for a long-term investor, as somebody that just doesn’t want to have the stress, I recommend anywhere between 2 percent to 5 percent dividend yields. But again, with the companies that you choose, they’re normally going to be blue-chip. Really? No companies.
I would look more at their dividend itself.
Number one, aristocrat dividends. I have a document here below for you, which I would really recommend you print it out. And these are the dividend stocks that you should begin investing in.
Overstock crowds are known to be the safest, the most reliable with a good dividend. And every single year they raise their dividends. That is the only way you could be part of this exclusive club of dividend over Overstock crap, a guest category. There is one ETF. It is also down below. Please download the documents so you can start investing with it.
And that kind of brings everything together because perfect diversification is really great. You can’t buy everything. So the ETF does have everything in one basket, kind of with a nice dividend as well per usual three months that you will just find out once you decide to buy the stock or ETF that you’re interested in.
And my second secret and is the most important one, drip dividend reinvestment plan. What this means is when you buy your dividend stocks or bonds, that you immediately put it into a reinvestment program. So every time you get back a dividend, let’s say for that 20 dollar, one dollar you receive every time, every three months, you get a portion of it, it goes into buying a portion of that stock.
Until you are able to buy an entire stock, what are the benefits of this? First of all, chances are if you bought that stock, you want to continue me acquiring more so that you could eventually get more dividends, right. The second is that you don’t have to pay taxes when you reinvest. If you do not have your stocks in a dividend investment reinvestment program in the DRIP program, you have to pay taxes on the dividends that you earn that year. But if it is reinvested, you don’t.
You only pay the taxes when you finally sell everything at once or sell portions. However, you decide to sell at the end. So these are my main tips. Download the document below to start investing with dividend aristocrats stocks. They are winners.
You can not go wrong with these stocks. They have been around for 25 years and more, always going higher and higher with their dividends. And these are blue-chip companies.
Companies that we know and trust. And chances are that they are not going bankrupt, especially not in the foreseeable future. And the DRIP program, reinvest all your dividends. So now, ladies, I want to hear from you. What are you doing to start investing?
I want to know. So please comment below or send me an email with all your questions and your action steps. I’d love to see what your portfolio looks like. And remember, investing isn’t easy, but it is simple and fun.
Where to Start – Day Trading?
Let`s get to know each other. I`m Marina, the trader chick you can learn more about my journey and how I started here.
If you want to start with futures trading training and start day trading on your own with ease and confidence – Sign up for the FREE How to day trade Mini Course.
After that, if you have any questions you can always ask me at thetraderchick.com. Come to my Facebook group and introduce yourself, let me know your experience with trading.
Are you ready to go beyond basics, learn day trading from the trader chick and start your dream life – check out Day Trading Courses.