Have you ever searched for a way to make money for doing
nothing? Does that sound too good to be
true? Well it is possible to do and 100%
legitimately. No cheating or cutting
down anyone to get ahead. In this
article I am going to attempt to explain why dividend stocks are the best way
to invest (especially for young people).
There are a few different ways to make passive income such as bond
interest, rental properties, and of course my ultimate favorite DIVIDENDS!
I believe dividends
are the safest and most reliable way because of the proven track record coupled
with the interest rates and ultra low yields on bonds. The housing market may be a great investment
as well, but I’m not near that stage where I can afford to drop enough money to
participate. I make a very small income
from my job, but am still able to grow dividend income little by little by
buying pieces of well run companies, holding onto them through time, and
reinvesting dividends into them to build a compounding machine. So many people I talk to are scared of
investing and think it is like gambling.
I would say maybe day traders gamble a little bit, but still have much
better chances at favorable outcomes. I
take a little bit of issue with those who advocate 4% withdrawal no matter
market conditions. Who knows how the
market will act from year to year? What
if you are selling assets at their all time low during a recession instead of
accumulating shares.
I believe our plan
(as well as many bloggers is a much more solid) See here of holding onto the ownership of
these quality companies and at the same time being able to cover all expenses
and thus live off of the income they throw off to you.
That gives you a safety net to fall back on in case you unexpectedly
lose your job or take a pay cut. The
ultimate goal for most of us is to have the option to not work if we so choose
not to and as soon as possible. It will
take a little discipline and some work to maintain your portfolio. It is not exactly easy to do all the research
always while working full time and/or going to school full time. I know this firsthand, but I believe it will
be well worth it in the end. Do you
think you need a high degree to figure it out?
I would argue that it may help you since I am going to school as I type
this, but I don’t think at all you have to be a scholar. Just do the research yourself, find what companies
you are comfortable with and learn from your mistakes if you lose money on some
then move on because you cannot always predict with 100% accuracy and win every
single time. Getting started may be the
hardest part and a lot of people I know say don’t have enough cash to start an
account. At the same time I see a lot of
those same people find enough money to spend on less productive things. I am definitely glad I started investing
early and very happy I found my primary strategy of dividend investing. It will allow me to eventually OWN my time
and one day give me the freedom to spend the time doing things I enjoy instead
of adhering to the strict schedule someone else drafts out for me.
What about you? Are you
a trader or someone who invests for income?
