Beginning your adventure as a dividend investor may seem daunting from the outside looking in, but that’s why I am here. In “How to Start Dividend Investing 101,” we discussed your long-term outlook for the journey. In “How to Start Dividend Investing 102,” we talked about slowly integrating dividends into your life—forming a habit of living off your investments.
Now, it is time to put our money where our mouth is. We need to pick a platform and start this investing train to become a habit for the rest of our lives. I have already written a couple of articles choosing a platform (Stock Marketing investing 105, Investing for Dividends 105), but this article is for beginners.
There are tons of brokerages, banks, and apps to take your investing dollars. I have five locations where I put my dividend cash, and I recommend two of those for beginners. The two apps I recommend are STASH and CASH APP.
Annuities vs. Dividends
The most important aspect of being a new investor is “automatic investing.” I first read the concept in “I Will Teach You to Be Rich,” where the money comes directly out of your checking account before you even get a chance to see it. Most of us already do this sort of thing with the 401Ks from our employers.
STASH is my favorite app for automatic investing because of the number of options you can tinker with. You can have weekly and monthly withdrawals from your accounts. I like weekly investments into my dividend stocks and ETFs.
I have my automatic investments divided into three categories within STASH: my main brokerage, Roth IRA, and spend account (which I link to a STASH debit card). When I first started, I believe I had $15 coming from my account each week.
The first schedule I employed was $5 to my brokerage, $5 to my Roth IRA, and $5 to Spend account. You can start with less if you’d like as well. Over time, you will find yourself investing much more as you begin to see massive results over time.
How to Stay Motivated
Today, I invest $175 per week into my STASH. Most of that goes into blue-chip dividend stocks like McDonald’s, T. ROWE, AT&T, AGNC. Of course, I also invest in my favorite index fund, VTI, inside both my brokerage and my Roth IRA.
There are two remarkable aspects of STASH that make it exciting to invest in—SPEND and “Cash to Invest.” I’ll talk about the Cash to Invest feature first. As I discussed in “Investing for Dividends 105,” most brokerage accounts have a money market account linked inside of the dividend account.
This money market account is sort of a cash flow checking account. For example, if I want to invest $100 in AT&T, it may only cost $97. The remaining $3 would sit in my money market account until my next purchase. When you receive dividends that you do not reinvest, they also collect in your money market account.
$1,000 Dividends Spending Spree
With STASH, you can send weekly money into your money market account, called “Cash to Invest.” It is cool because I forget I have money going into my Cash to Invest most of the time. I may see it once a month or even less.
Then one day, I want to make some purchases, and I may have $40-70 there to invest. I like this feature a lot, and it seems like free money by the time you get to it. SPEND is the exact same, except the cash sits on your debit card account.
I have yet to spend any money using my debit card, and I have used STASH since December 2019. When you have cash sitting in the SPEND bucket, you can use it across your brokerage, Roth IRA, and custodial accounts. So, it gives you more options to leverage your money. It also has a Stock-Back feature, which gives you a percentage of your spending back as stocks. Again, I don’t use the debit card.
Retirement Planning for the Average Person
Finally, you can still log into STASH and purchase stocks any time you want. If McDonald’s drops 10% in a day, I would like to buy it at those prices. I can still log in, make a purchase, say $300, and that money is pulled directly from my linked checking account (in my case, Wells Fargo). This gives you maximum flexibility to make investments on juicy dividend days.
All in all, STASH is exceptionally newbie-friendly, and the automatic investing options are second to none. You can also choose to have your dividends collect in your Cash to Invest account. I reinvest all of mine, but in about 20 years, I will just let them accumulate. Then I can transfer them to my debit card.
Inflation vs. Dividends
I use the CASH APP, the exact opposite of my STASH account. I love the Cash APP because my dividends come directly to my checking account. I had one of the best moments of my dividend investing career with the CASH APP.
I was out shopping at the PX on base one day during lunch. I received a buzz on my phone, and I read that AGNC paid me a $13 dividend. I looked at my CASH APP, and sure enough, I had a fresh $13 available to spend that very second.
I still find the CASH APP one of the best ways to get addicted to investing for dividends. Yes, reinvesting your dividends is impressive, but taking a few and spending is how you train yourself to first pay yourself, then live from your investments⏤this is how the rich spend their money.
Dividends vs. Royalties part II
This month, July 2021, I reached $80/month in my CASH APP dividends. That is 80 guilt-free dollars that I can spend as I wish, no remorse, no questions. Once you understand the value of living from your investments, it is life-changing.
You realize that your investments are paying you, not an earned income job. You can also make money while you sleep, which is the only way to become financially free. For these reasons, I highly recommend the CASH APP for beginners getting into the stock market.
After you use these platforms for a few months (I recommend 4-6 months), you can move on to more complex platforms that can broaden your investing options. The other platforms I use are M1 Finance, where you can make intricate investing pies. Then, Charles Schwab and Wells Fargo are highly complex but offer you almost every investment option under the sun.
In the end, pick whatever platform you can understand. You may already have the CASH APP downloaded, so that it might be a good starting point. I have an article on my favorite blue-chip stocks that may help you make some early choices.
The most important thing is to jump in and start learning. As soon as you become addicted to receiving passive income, the sooner you will start making choices that can help free yourself from the confines of work. Welcome to Stress Freedom!
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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.
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