Dividend Investing 101 – All You Need To Know

Index investing is a great way if you’re starting out in the stock market and want to only dip in your toes. I’ve discovered a whole other pool: dividend investing, which I am diving in head-first.

I asked myself, what would be the difference if I’m still focusing on stocks but rather on dividend-paying stocks? I will have the same growth potential as regular stock and on top, they will pay me dividends regularly – which will give me passive income.

Passive Income

We all want passive income – it’s the classic ‘get rich while you sleep’. Everyone dreams about that (pun intended). Passive income is the main reason I am drawn to dividend investing. I would much rather see monthly cash flowing my way than holding a volatile lump sum of money.

Keep The Money

I prefer to re-invest in a way that suits me at that moment. Regardless, the outcome stays the same: you’re reinvesting your dividends in the stock market for more growth.

Multiply The Money

Historically, the stock market moves up with an average of 7% each year. When the value of the stocks that pay you dividends go up, you’re gaining from that.

Dividend Investing Is Just Like Eating Nachos

You don’t only want to have the growth of the stock (dip one), but you also get the dividends that are paid every period (dip two). The perfect double-dip is when your dividends are also growing over time.