Investing in dividends is a strategy of buying stocks that pay dividends in order to create a passive income stream from your investments. This income is in addition to any growth in your portfolio as its stocks or other holdings gain value.
Today’s video, is all about dividend investing explained for beginners. If you stay till the very end you will learn how to get started with dividend investing and be on your journey towards financial independence. Additionally, you will learn what dividend investing means, how it works, what are the different types of dividends, and other basic information that every beginner in investing should know.
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Dividends represent a way for a company to pay out its shareholders by giving back a part of the profits made by the corporation.
But not all companies that are part of the stock market offer dividend pay-outs for their shareholders. There are a lot of S&P companies that don’t pay out dividends, such as Amazon, Biogen Inc., Autozone, Autonation Inc., and so on.
The rationale for this decision is to reinvest the majority of income back into the business, thus increasing the stock price and potentially increasing returns. Coca-Cola, on the other hand, distributed nearly half of its earnings to shareholders in the form of dividends, amounting to about $2 billion.
So how can one start investing in dividend-paying stocks?
There are basically two ways to invest in stocks: either purchase them directly from the company or through a broker of your choice. The main difference between them is that not all companies offer this feature and even the ones that do, require a minimum investment that can vary between 50 and 500 dollars.
Therefore, the most popular way to buy stocks is through a brokerage company that can facilitate this process for you. Since each brokerage company sets its own commissions and fees, this is another point of concern for you as a novice investor.
Timeline:
00:00 – Intro
00:48 – What are Dividends
01:56 – How Does Dividend Investing Work?
03:18 – Dividend Investing Strategies
05:13 – How to Start Investing
05:46 – Best Practices
07:07 – Dividend Investing Examples
08:30 – Types of Dividends
09:20 – Conclusion & Outro
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Disclaimer *We are not financial advisors and none of this is meant to be construed as investment advice, it’s for entertainment purposes only. The video is accurate as of the posting date but may not be accurate in the future.
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