Building Passive Income Through Dividend Investing

derrickjmurray (25)in #passiveincome • 7 years ago

Passive income it is what we all seek, who likes trading working hours for income, I don't and neither should you. I prefer to do the work upfront and continue earning income for months or years upon years into the future.

Dividend income is important, while it will not make you instantly rich as a high flying stock or other investment there are numerous benefits.

5 Benefits of Dividend Stocks

Truly passive, you do the research once and follow up periodically and you get ongoing income that you do not have to do ongoing work for.
It allows you to build income over time, most dividend paying stocks increase the amount they pay you over time, this allows your income to continue to increase and keep pace with or beat inflation.
Dividends allow you to ride out market downturns, growth stocks do not provide this benefit.
Dividends can be reinvested to create a dividend "snowball"
Dividend Stocks are generally less volatile than growth stocks

Monthly Dividend Stocks and Why You Need Them

Monthly dividend stocks are stocks that pay dividends each and every month. Most dividend paying stocks pay quarterly, and on different schedules (ie not the same time every quarter), so this leads to irregular income that is hard to plan for.

Monthly dividend stocks help smooth out this trend so you at least have some dividend every single month.

How To Get Started With Dividend Investing

To get started you should first build up some savings, you can invest in an ETF or index fund that has dividend paying stocks within the fund, this will diversify your relatively small amount of funds over many stocks helping to reduce risk. Once you get around $10,000 in this account you can sell about half of it and invest that $5,000 in individual dividend stocks that are a value at the time of investing.

This will ensure you stay diversified, at the same time continuing to earn dividend income. Continue to add funds to these accounts and invest in individual stocks when your account hits $10,000 goals.

#dividendinvesting #dividends