No more excuses. Let’s try something different today. I want to start you off as a dividend investor at the lowest level.
Most people believe you need a ton of money to become a dividend investor. This theory is partially true.
If you want to retire on dividends alone, you will need millions of dollars—true. However, you can supplement your current income by investing $1,000 (or less) in dividends.
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The most challenging part of dividend investing is starting, so let’s begin today. I will use the template from my article “Your First Five Dividend Stocks” as my guide. Let’s begin.
Picking a platform. This part is easy because STASH (affiliate link) is the best at dollar-cost averaging. Feel free to use this link because it helps you and me.
After opening your STASH account, answering the questions, and attaching a checking account, you can pick your first investments.
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The first five templates. The first five dividend stocks I recommend are one of the following:
- Index Fund– QQQ, DIA, VTI, SPY
- Blue Chip stock– January- PM, MO, MPW
- Blue Chip stock- February- T, VZ, ORCC, PG
- Blue Chip stock- March- MCD, PRU, ARCC
- Monthly Paying Income– AGNC, LAND, O, PFF
If you don’t understand the letters, search for them on Yahoo Finance. It is a good exercise on how to look up stock tickers.
Once you pick one of each category, you’ll want to set up your investing calendar. You can simply invest one dollar a week into each stock for a total of $5.
Wow, what’s five dollars? By investing five dollars, you will be one of the few Americans with a brokerage account.
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You are well on your way to creating passive income for yourself and generational wealth for your family.
The magic of compounding applies to more than just compound interest—your knowledge also compounds exponentially.
If you commit to investing $5/week for a year, you’ll be investing even more by year two. How will you find the additional money?
That’s the power of compounding. Once you get the inch for investing for dividends, you’ll want to put in more cash.
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This urge will lead you to try new things like creating content, working overtime, driving Uber, or getting a roommate.
What’s an infinite return? Eventually, you stumble upon the concept of an infinite return. A good book for understanding this concept is “Rich Dad’s Guide to Investing.”
An infinite return is essentially owning an asset (that pays money) free and clear. At that point, it is printing money for you.
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One of the reasons I love writing books is that it is entirely free for me. So, if I earn $2 for a book royalty, it is an infinite return.
Once you understand the concept, you will become obsessed with building infinite returns. Once you have infinite money, you can invest in creating infinite dividends.
The magic of having roommates or house hacking is that it costs nothing and produces a large amount of infinite income.
It starts with $5. All of this magic begins with your five-dollar investing habit. You’ll also gain trust in the markets as you watch your money fluctuate.
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Investing for dividends is different from capital gains investing. Most people invest for capital gains and always want prices to increase.
However, we live on income, revenue, and cash flow. Let’s take a $100,000 Pokemon card, for example.
This Pokemon card doesn’t generate income unless you sell it—the same with your primary residence, growth stocks (that don’t pay dividends), and game collection.
What if you created a YouTube channel around your Pokemon card collection? You would now generate income centered around your Pokemon cards.
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Investing for income wins. When you focus on income, you become less emotional. Bad news always sells better than good. The reports around your favorite stocks will generally be negative.
My favorite company stock is McDonald’s (MCD). 2020 was a rough year for most fast-food companies, and McDonald’s wasn’t any better. Then they closed stores in Russia in 2022.
However, 2022 was a fantastic year for McDonald’s, as their stock reached all-time highs. I stayed with the company because I have been through this business cycle before.
Your stock will be down. Then it becomes a good value purchase, so it rises. As its price increases, more people buy, and it becomes a phenomenon.
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Once it peaks, people look for the next big thing. Capital gains investors spend their entire careers climbing this mountain.
Dividend investors (like us) just relax in our hammocks and wait for the dividends to arrive. You learn to build this mentality when you invest $5 to $50 to $500.
Then when you start dropping big money into your accounts, you won’t get emotional about it. Taking your time and learning with small amounts is the safest way forward.
Conclusion. There is much to learn about the stock market, but most centers around controlling your emotions. You can only understand the roller coaster once you get on the ride.
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As a $5/week dividend investor, you are taking massive action toward building your future. My first month of dividend investing netted me $0.25. I made $1,800 in December 2022 (three years later).
Too many people get analysis paralysis and cannot get the money into the account. Today, open your STASH (affiliate) account and invest a few dollars.
Once you receive a dividend over $1, you’ll strive to get even higher paychecks. It may take six months, but it will come to you.
Congratulations on walking down the path less traveled. Always share your experience with others because teaching helps you become a better learner. Good Luck!
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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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