Why are dividend stocks the best investment you can make to secure your future?
When you invest in dividend yielding stocks, you have some very powerful forces behind you that you probably won’t notice at first glance.
Let me explain...
When you buy stock in a company, you own a small piece of that business and become a shareholder. The types of companies we’re after pay their owners a share of the profits they earn and these payouts are called a dividend. What is a dividend? Click here to find out.
You will get paid cash on a regular basis for being a shareholder in the company.
Once you get your first cash payment you’ll be hooked like I was!
The best dividend stocks have a long history of not only paying out dividends but also increasing those cash payouts annually through good times and bad. Some of these stocks paying dividends have increased their payouts to shareholders by over 10% annually for many decades.
Where else can you get a 10% raise every year?! You will learn where to find these high paying dividend growth stocks later on.
Now here is where the powerful forces come in...
By investing in stocks with dividends, you will get paid a percentage of the company profits in cash per share that you own. You now have cash that you can reinvest to buy more shares that will pay you more cash!
Ahhh the magic of compounding!
These champion stocks that pay dividends also have a wonderful habit of giving you a raise every year. As they increase their sales and profits, they also boost their dividend payments to shareholders, often by more than 10% annually. This gives you not only cash to reinvest, but a growing stream of cash reinvest.
This one-two punch of dividend reinvestment and dividend growth give you a very powerful compounding machine that over the long-term will make you wealthy. You just need a little patience to wait for the results to take effect. Click here for a real life long term example of investing in dividend stocks.
Speaking of patience...
The results will be unnoticeable for many years, but by continuously reinvesting to buy more shares, your stream of dividend income will grow larger and larger over time. This will produce substantial results over the long-term.
The name of the game is to focus on building your passive income stream from dividend growth stocks until it covers your living expenses. Once your living expenses are covered... you're free!
Here are some additional articles on the advantages of investing in stocks with dividends:
Growing Income From Top Dividend Paying Stocks vs. Mutual Funds, Bonds and Annuities
Secure Income in Retirement from Stocks Paying Dividends
Now that you know why dividend stocks are such a powerful wealth creator, let’s get into some things you need to know about dividend yielding stocks!
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