The world runs on dividends and love. Well, I just made that up, but MY world runs on dividends and love. I wrote the article “How We Plan to Retire on Dividends” roughly five months ago, and a lot has changed since then.
Actually, everything is the same, just the amount of passive income from dividends has increased—by a lot. The month that I wrote the first article, we received roughly $200 in dividend income. Last month, we received $550 in dividends.
The moral of the story is to keep focusing on your dividends, and the results will speak for themselves. Watching our dividend portfolio grow has been a breath of fresh air. We are still in the workforce, but soon (4-8 years), we will be relaxing on the beach, enjoying our dividends.
The first article was a collection of all the investing pieces I had written over the prior five months. Well, I will continue that tradition and round up all the recent investing articles and put them in one lovely spot for you.
Even better, I am going to collect them together in a book and release it for free. You should see a link to it above this paragraph. Go ahead and grab it, read it, and start building your dividends today.
Growing a dividend portfolio will teach you patience and the importance of compounding. In our first month of dividend investing, we earned $0.03. To go from that to $550/month is absolutely insane. And we are just getting started. I plan to keep writing about dividends and our story until the end. So one day, I will write an article titled “How We Retired on Dividends!”
With no further ado, let’s get into the investing articles that could change your life. And don’t forget to grab part one, which is more focused on beginners. Enjoy!
INVESTING MINDSET
Having the proper mindset for investing is the most crucial aspect of becoming a successful dividend investor. If you aim for huge capital gains or overnight income, you are in the wrong place. Everyone should know “Why They Need to Invest in the Stock Market.” Having an overall vision of your life, goals, and dreams is vital to long-term investing success.
My wife and I have been living frugally for a while now. Since dividends are guilt-free money, we decided to spend $1,000 on a dividend shopping spree. We planned for this to take place on Black Friday; however, it will be hard to spend this amount of money. We just aren’t used to spending this type of cash on ourselves.
Investing is especially difficult for women because of the unknown. Most women are security-focused, and investing removes a layer of security from the investor. I wrote an article titled “The Woman’s Guide to Investing” that I hope can assist you through the early stages of investing. The key is only to invest the amount you feel comfortable with at first.
A lighthouse brings in ships through bad weather and foggy nights. Dividends can do the same through rocky and unknown times of retirement. Let dividends be your lighthouse to guide you when things go sideways through retirement. It’s good to have income outside of fixed sources.
I started the Cash App dividend challenge to help new investors learn how to invest cash daily into the markets. Over time, you can build significant wealth by just investing small sums of money. After 52 weeks of the dividend challenge, my portfolio is paying $100 in dividend income. Not too shabby.
Everyone believes that we are heading for a market crash soon. Maybe, maybe not; however, I can promise you there will be a crash sometime soon. As investors, we always have to prepare for the next bear market by using defensive investing, hedging, and keeping cash on the sidelines.
Fall is an excellent time of the year; it’s even better when you are flush with dividends. There is no better time to FALL into investing than the autumn season. If you begin this year, by this time next year, you can reap the benefits of dividend investing by next Christmas.
INVESTMENT PLANNING
Having a considerable dividend growth investing (DGI) portfolio can bring you a significant sum of dividend income. However, using options, you can safely increase your income by selling covered calls or cash-secured puts. Here are the five benefits of options trading.
If you are a younger investor, cryptocurrencies are all the rage right now. But don’t forget about stocks. Stocks and cryptos, when used together, can be powerful allies and can make you rich.
Income investing is different than dividend growth investing. Some of the high-yield securities that I use in my income portfolio are business development companies, closed-end funds, and real estate investments trusts. Together, these securities give you income today to invest for tomorrow.
Dividend growth investing uses dividend-paying blue-chip stocks to build a portfolio that will compound on itself until you are rich. The concept is to buy these companies as they increase their dividend payments, the stock price rises, and you reinvest the dividends. Many people have become rich this way. Here is a list of my favorite 24 blue-chip stocks.
THE MAGIC OF
The magic of dividends is that they are guilt-free money. You are free to spend them as you wish because you know you’ll be getting another payment very soon. Having a stable of dividends can be very addicting indeed.
Index funds may get a bad wrap from the DGI crowd. However, the magic of index funds is that they can provide your DGI portfolio with the growth element to keep up with inflation. As your blue-chip slowly grows, index funds can accelerate your portfolio’s growth, along with the overall stock market.
I never understood the fascination with Roth IRA until I had an idea. I could use my Roth IRA to grow my index funds tax-free. Then, when I hit age sixty, I can build an income portfolio with all of my Roth cash and get all my dividends tax-free. I get a high-income dividend portfolio that pays tax-free cash flow—that’s the magic of a Roth IRA.
The magic of dividend growth investing lies in its simplicity. You pick the best blue-chip companies, schedule auto investments, and let the power of compounding create you an income powerhouse. It seems simple; it is simple.
The magic of income investing lies in its complexity. You pick outstanding high-income securities that pay you colossal cash flow. Your cash flow builds up, and you redeploy your dividends into more high-yield securities. Rinse and repeat until rich.
INVESTING FOR DIVIDENDS
The Investing for Dividends series covers some unique aspects of becoming a dividend investor. I covered some great topics over the last few months. I talked about the importance of index funds to your dividend portfolio, the various ways to extract your dividends, and the pros and cons of dividend ETFs.
HOW TO START DIVIDEND INVESTING
Getting started with dividends is the most challenging part of the entire process. Once you have a game plan, it is pretty simple to auto-invest your money into the correct portfolios. But, you have to start somewhere, and that’s why I created the How to Start Dividend Investing series.
Over the last few months, I have covered; how to find your “why,” setting tiny goals, picking the platform that fits your needs, and how to choose your stocks. Hopefully, there is enough to get you heading down the right path.
BECOME A BONAFIDE INVESTOR
Becoming a dividend investor is incredible, but you have to understand the larger investing landscape to be truly successful. There are so many outside influences on our stocks that we need to know how they affect stock prices.
We need to understand what we can control as either an insider or outsider, how to recognize inflation, prepare for inflation, the value of commodities, and why we should leverage gold and silver. These are just the start of some of the influences on the stock market performance.
VERSUS SERIES
I spent a lot of time comparing various investment vehicles over the last few months. As investors, we only have limited amounts of cash to invest, so we need to make the best decision.
We can invest in multiple things, so having a comparison can help us decide what’s best for our current situation. What’s best now may not be what’s best for our entire future. We need to be flexible and educated.
Here are some of the verses articles I wrote over the last few months; “Dividends vs. Royalties 2,” “Inflation vs. Dividends,” “Annuities vs. Dividends,” “Preferred Shares vs. Closed-End Funds,” and “Dividend Growth Investing vs. Income Investing.”
INVESTING BOOK TAKEAWAYS
It’s hard to believe that I only read two investing books over the last five months. I think I focused on reading about my book business. Anyways, “Covered Calls for Beginners” gave me an inside look at how to safely profit by selling covered calls on top of my DGI portfolio.
“Mortgage Backed Securities” are investments vehicles the average investor can leverage to profit from Mainstreet mortgages. MBS are relatively safe, and you will mainly have to worry about interest rate shock.
CONCLUSION
It has been a great five months, and I have learned a lot about dividends. I have focused more on my income portfolio because my DGI portfolio is in auto-pilot mode right now. I am proud to offer this book for free. Please download a copy now.
My next investing article will be the first to go into part three of the series. So, hopefully, I will see you in five months (or sooner). If you want to read more from me, follow me on Twitter or my Facebook Page. Enjoy and Happy Investing.
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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