Don’t make dividend investing harder than it is. Dividend paying stocks are stocks that pay you to own them. You own them long term and they are not intended for day trading. Think of your money as workers, steadily making more money. Like robots that don’t eat, don’t sleep and don’t need time off.
Two ways to find dividend paying stocks are:
One, you pay a broker to buy the stocks. They will ask you some questions to determine which stocks would be suited to you. Sometimes they charge a fee to manage your account so make sure your aware of this up front. You pay the fee regardless of the performance of the stock.
Two, you can screen and choose your own stock. Most, if not all companies like schwab, etrade and others have a stock screener. You enter the criteria and a list comes up for you to research. Once you have found the stock or stocks you want to buy, a broker can help by guiding you through the steps. They usually don’t charge to help you because it’s considered “self directed.”
Here are some things to consider. There are several types of DPS’s. There are some stocks where the dividend will fluctuate each quarter based on earnings. If they do well then the dividend is good, if not, then the dividend is not so good. Some stocks pay quarterly some monthly and some annually.
Individual stocks that pay dividends are usually more consistent. This helps with the peace of mind or anxiety that some experience with the stock market. Patience is the best thing you can have, don’t panic and sell it “when” not “if” the stock goes down. Stocks go up and down every day, that’s why DPS’s are good.
For example, you buy a stock that pays a quarterly dividend of 0.23 cents. That’s 0.23 cents per share, if you have 500 shares your dividend will be $ 115. The stock you bought cost $8 per share. So you paid $4,000 for 500 shares. Now when the stock drops to $7.50 the dividend will still pay $115 per quarter, which is $460 per year. This is why dividend paying stocks are good. When the stock goes over $8 it will still pay the same dividend. This stock is paying 12% and yes it does exist, the symbol is FULL.
Now calculate what it would be when you have 5,000 shares...10,000 shares. Makes you want to put as much as you can into your IRA doesn’t it?