The way I do my dividend investing is a little unorthodox. First, I have a nice military pension coming my way when I retire. This gives me enough cushion to invest how I please. When you create your own plan, cater it to your specific needs. I have 4 distinct ways I invest in dividends in my main brokerage account. They are:
Quarterly Individual Stocks: These are all the “fun” individual stocks that you may have heard of. Names such as McDonald’s (MCD), Apple (AAPL), and Wells Fargo (WFC). Each stock is paid quarterly and the different stocks pay in different months. So I try to get an arrangement of stocks that gives me consistent monthly incomes. I take these dividends in cash.
Monthly Individual Stocks: These are companies that pay monthly dividends. Most of these companies are Real Estate Investment Trusts (R.E.I.T.s). You probably haven’t heard of these companies. Some are AGNC Investment Corp (AGNC) and Realty Income (O). They lay a solid foundation of monthly income. I take these dividends in cash.
Quarterly ETFs: Electronic Traded Funds are baskets of stocks that you can purchase from the stock market under one combined share. They are awesome for diversifying your portfolio in one share. My quarterly paying ETFs are mostly total stock market ETFs. This means that one ETF holds backets of hundreds of companies. My favorite is Vanguard Total Market ETF (VTI). This diverifies your portfolio. I reinvest my dividends back into each ETF.
Monthly ETFs: The monthly ETFs are high dividend-paying ETFs. They are diversified but mainly focus on dividend-paying stocks. They don’t grow as fast as most stocks but they provide lots of income. My favorite is Invesco High Dividend Yield ETF (KBWD). This is the base of all my dividend operations. I reinvest my dividends back into each ETF.
These are my dividends. I will break down each of my different dividend portfolios in separate posts. I like to take cash on my individual stocks. I use that cash to reinvest in different individual stocks that may be on a discount. Warning: Investing in individual stocks is not for the faint of heart. If you are not willing to read the daily news, you may want to try ETFs first. Good Luck!
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. 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.
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