Are Dividend Investments A Good Idea?
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Are Dividend Investments A Good Idea?
Dividend investments are a popular form of investment for many individuals looking to build a steady stream of income. Dividend investments involve purchasing stocks that pay out regular dividends to their shareholders. These dividends are typically paid out on a quarterly or annual basis, providing investors with regular income without having to sell their shares.
But are dividend investments a good idea? The answer to this question ultimately depends on an individual’s investment goals, risk tolerance, and financial situation. However, there are several factors to consider when deciding if dividend investments are right for you.
One of the key benefits of dividend investments is the potential for regular income. For individuals looking to supplement their income or build a stream of passive income, dividend investments can be a reliable source of cash flow. This can be particularly beneficial for retirees or those looking to build a nest egg for the future.
Additionally, dividend investments can provide a degree of stability to a portfolio. Companies that consistently pay out dividends often have a solid financial footing and may be seen as more reliable and trustworthy investments. This can provide a degree of safety and security for investors, especially during times of market volatility.
Furthermore, dividend investments can offer the potential for long-term growth. Reinvesting dividends through a dividend reinvestment plan (DRIP) allows investors to purchase additional shares of the stock without having to pay brokerage fees. Over time, this can compound the investment and potentially lead to significant capital appreciation.
On the other hand, dividend investments do come with their own set of risks. Companies can reduce or eliminate their dividends at any time, which can lead to a decrease in income for investors. Additionally, stocks that pay high dividends may be seen as more stable, but they can also be less likely to grow in value compared to growth stocks.
Furthermore, dividend investments can be taxed differently than other forms of investments. Dividends are typically taxed at a higher rate than capital gains, which can impact the overall return on investment for some individuals.
In conclusion, dividend investments can be a good idea for many individuals, particularly those looking for a reliable source of income and a degree of stability in their portfolio. However, it’s important to carefully consider the risks and potential tax implications before making any investment decisions. As with any investment, thorough research and consultation with a financial advisor are recommended to ensure that dividend investments align with an individual’s financial goals and risk tolerance.
I was advised to diversify my holding among several assets such as stocks and bonds since this can protect my holdings for retirement. I'm seeking to invest $400K across markets but don't know where to start.
Dividends from the stock market encouraged me to begin investing. What matters, in my opinion, is that if you invest and make additional money in addition to dividends, you will be able to live off of dividends without selling. It implies that you can provide that benefit for your children, giving them a head start in life. I've invested more than $600K in dividend stocks throughout the years; I'm currently buying more today and will continue to do so until the price falls even further.
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Mrs. Charlotte Miller
It is greatly amazing the way I moved from an average lifestyle of little, to earning close to $1 million, utter shock is the word. I have come to understand a lot in the past years to doubt that opportunities abound in the financial markets. Most importantly, knowing where to focus is key. All thanks to Christy Vallen D'souza my personal financial advisor, currently managing my investment portfolio and my retirement.
Great stocks and I just bought in on them, but I'm interested in making a short-term profit, let's say turn a $150K to $ 500K in 6 months, I'd appreciate tips on how what stocks to buy to make this much profit.
I dont see a problem with investing in dividends
Dividends are awesome. I don't invest in single stock but in three well diversified dividend ETFs. I have about 300k in there (and adding each moth) whilst getting nice dividend pay-outs each year. I don't understand what Ramsey is saying here. My dividends pay my car costs and 2 international holidays throughout the year. I am freed up with the money I earn from my job and have no issue with saving for more investment, a house etc whilst not being required to live like a slave.
Does anyone know what Dave means by "Growth and Income, Growth, Aggressive Growth, and International"? I'm just guessing here, but sounds like:
Growth and Income – VOO (large cap)
Growth – VO (mid cap)
Aggressive Growth – VB (small cap)
International – VXUS (total international)
If this is what he means, wouldn't it be more efficient to just buy VTI and VXUS or even better, VT to follow correct market cap weighting for efficient market theory?
I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Mrs Katherine Flores.
Ramsey’s advice is for the completely financial inept.
He even states he bought real estate with all cash = passive income
Bad advice
I like dividend growth companies because more often than not their annualized dividend increases beat inflation. SCHD is a dividend growth ETF that's averaged over 10% annualized dividend increases for the past 5 years. Imagine getting a 10% raise at your job each year. If you can survive one year on dividends, you'll absolutely thrive in your 20th year living off dividends
Dave i get you made it in the 80s-2000s but your plan is kind of out of date.
You're way too vauge on the stocks you're recomending the math isnt mathing these days.
People who invest in dividend stocks usually don't understand dividends.
Here’s the thing about dividend investing: generally the blue chip companies have little room for further growth. And so as a long term investment, the growth stocks tend to outpace the blue chips.
Most blue chips end up getting priced to where the yield is a couple points above the prime rate.
Ex: if a blue chip is paying $1.20 a year in dividends, a $60 share price would give a 2% yield.
At the beginning of the year, I increased my stock purchases somewhat, but not much. Why am I being so hard on this? Even if others in my sector make six figures apiece, I still want to be the first person in my polygamous family to earn a million dollars. I understand exactly what it costs to work harder in order to make more money.
I'm 59yo and have no mortgage and no debt. I have 2.4 million in my 401K and will continue to max out my 401K until retirement. I also invest in dividend stocks that pay about 16K a year. I see the stock investment will give me a passive income with continued investment of several thousand a month plus my 401K withdraw and my social security. Unlike Dave i don't have any experience in real estate. But Dave's way is also great idea to get to finanicial security
Most dividend are below 5% regardless, with almost no capital gains on those stocks. Youd be better off in CDs or treasuries with todays rates. Dividend investing is essentially lower risk stock investing. I think Dave's counsel was wise. Most people dont even know that the stock price is reduced by the dividend payout when it goes ex. Dont buy what you dont understand.
I want to diversify my $400K stock portfolio in to profit-yielding dividend shares but am not sure which to buy into because I have lost over 35% from my stock portfolio since Q2
Gee, don't know what to say about this. I bought a LOT of MPC during the height of the pandemic as it had hit a 20 year low of $21.50 / share and was giving a 14.8% yield. Here we are 3 years later and it's $150.00+ a share and I get $3500.00 every quarter. Stock went up 650% from where I bought it. Of course the adjusted yield is now something like 1.2% but the divy is still the same. The quality problem now is avoiding a big capital gains tax, even at 15% if I want to sell and reinvest in something else.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Dividends have been great for me in Canada. They're taxed much more favorable than income, and even better is when you find a company that's been around for years and continues to grow the dividend. It's not free money no, but I've seen both growth and payments from Canadian bank stocks.
Combating the impact of inflation is one advantage of owning dividend-paying stocks. This makes them a safer choice for those who don't want to take on too much risk.which is the path i'm on to hedge the losses on my $350k portfolio, but are there any drawbacks to buying dividend stocks?
Venturing into the trading world without the help of a professional trader and expecting profits is like turning water into wine, you would need a miracle, that's why i trade with JENNY PAMOGAS CANAYA , her skills set is exceptional.
The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.
Divs are great motivators but they are not free money. I like to see a small dividend and some stock buybacks. Also, learn about "Dividend Traps" that's when a company is giving dividends and lowering the Nav (stock price) to make you think your making money BUT your invested capital is decreasing.