Guide to Dividends

In love with Dividends

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Let’s talk about dividends! Learn to invest in the stock market today and passively receive dividends. I own and I got pay dividends. I am looking for more freedom and not more money, the kind of freedom I am looking for is time (the passive income of my next dividends can help me to obtain) and not be wealthy overnight. However, if I get to that point, more than welcome . Beating inflation is my goal. What will be my next dividends or how to get more dividends? How do you beat inflation? And how to invest in the stock market today? Find it out!

Disclaimer: There are many more investment options, choose the one that suits you best and stick to it. Yesterday, I received another dividend from IRM, which is one of the best stocks that pay dividend.

What is a dividend?

You wonder what dividends are? According to investopedia, a dividend is the distribution of a portion of the company’s profits, decided and administered by the company’s board of directors, and paid to a class of its shareholders. Common shareholders of dividend-paying companies are generally eligible as long as they own the shares as of the ex-dividend date. Dividends can be paid in cash or in the form of additional shares.

For me, it is a profitable investment. I will not tell you what stocks to buy now or any cheap stocks that pay dividends, I leave that to you in a list of companies that pay dividends. I can tell you there are many companies with high dividends and cheap stocks that pay dividends every month.

The strategy that I use is called, Dividend Growth Investing (DGI) or invest in increasing dividend, in which I seek to generate more dividends to increase my passive income. There is a great website where you can find out which companies pay dividends, the list is made of 765 stocks that have generated dividends every year for at least the last five years. From here, you can get some ideas of the best stocks that pay dividend. You can also check another list from Dividend Baron.

Remember, the most important thing of all is, to beat inflation, and if you beat the “market” it’s a big plus.

How often do stocks pay dividends?

Some companies pay dividends monthly, others quarterly or annually. A best stocks that pay dividend company may be closer than you think.

How much do I get paid and how to know the next dividends?

It depends on the stock yield of the company. Remember, governments are taking their share of the money you generate.

In my next posts, I will share with you an excel file that I created to track your investments, dividends, earnings, a little bit easier than this one of olvidatedetucerdito (from where I took the X-ray sheet) but surely not as complete. However, it is enough for me.

The government produces wealth as ticks produce blood

I have no idea

Sorry, I don’t know who said the previous masterpiece, maybe it was me? Regardless, we must invest in the stock market today, don’t wait until tomorrow. In most countries there is a deficit in the retirement at the moment, some examples are:

  • The US pension deficit is $ 216 billion at the end of 2019
  • Malta expects the public pension system to post a deficit of around 5.8% of GDP by 2060 if new regulations are not implemented soon
  • In Spain, the pension deficit is projected at € 1.25 billion in the current year.

What does this mean?

From my point of view, nobody is sure that in 30 years (maybe less) we will get a public pension. It doesn’t matter how hard you work. Better safe than sorry!

Let’s go to business! My current July2020 portfolio in the stock market is 32.4%, but surely the size of the portfolio will increase.

Portfolio weight

As you can see in the following image, the dividends of the S&P500 aristocrats have companies at the highest level (more security) than the S&P500.

SP500 vs aristocrats

The return adding the dividends is greater for the dividend aristocrats

Dividend ROI

To know the next dividends or the dividend calendar you can check this page with the history of the dividends. Remember that a dividend investment is a profitable investment that generates passive income.

I am focusing on stock dividends and to be specific on aristocrat dividends, which are best stocks that pay dividend in the stock market today. Instead of, stock value or trading. They all have their pros and cons. However, I am more comfortable with stocks that pay dividend, and if there are at cheap price, even better.

I feel quite safe with the path I have taken and I sure have much more to learn.

Is my recommendation is that you invest in the stock market today?

Definitely, but be careful, study and try not to speculate.

Can I invest in dividends from S&P500 aristocrats?

Sure, you can buy an ETF that replicates this index like: the VHDYX

Strategy rules to follow:
  • No stock should represent more than 10% -12%, if so, I need to rebalance the portfolio
  • If a company cuts its dividends, which means they are no longer aristocrats, they should sell this company, unless it is for the greater good. A new adquisition or a big crisis
  • Adding more dividends to the stock portfolio
  • Buying an index fund

For my following entries, I will share with you the meaning of the different dividend dates, the dividends aristocrat, Indexes, how to safe money and much more. Stay tuned and follow the blog!

If you have time, check my other posts and let me know if you have done something similar.

PS: Don’t forget that I will share in the next post my amazing Excel file to track investments, dividends, etc.

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