THIS WEEK: GET CHECKS IN THE MAIL

Wouldn’t you like to have a continuous stream
of money coming in every month without having
to do much of anything?

One of the wealthiest men of all time said,
“Do you know the only thing that gives me pleasure?
It’s to see my dividends coming in.”

One of my passions in life besides being a
financial coach is studying how rich people
acquired their wealth and how they invest their fortunes.

This quote was stated by a gentleman who
would have an estimated worth of $492 billion in
inflation adjusted dollars today. That is billions with a B.

You can put Carlos Slim, Warren Buffet, and Bill Gates
wealth together and you would not even come close
to this titan’s wealth in his time period.  The man I am
referring to is John D. Rockefeller, the founder of
Standard Oil Company. Wikipedia states that, when
considering the real value of his wealth, Rockefeller is
widely held to be the wealthiest person in history.

When someone has a quote like Rockefeller’s,
you know their mindset is totally different than
what the masses think about the stock market.
The masses love to tell you about how bad the
stock market is.  We all have heard those negative
statements blasted on the television, or from
friends at a party, and even family members
at a family gathering.

Statements like:
– You will lose your shirt if you invest in the stock market.
– Buying stocks is too risky.
– Those banks and firms on Wall Street are the bad guys.

I found that these statements are false. I decided
at an early age to work on what is called a “Wealth Mindset.”

With this mindset along with acquiring knowledge
and experience in the stock market, it changed my
world around me forever.

If you are new to investing, you may be asking:
What is a dividend and how do you get them?

A Dividend:

A dividend is an after tax corporate profit
that a company pays out to its shareholders.
For every share of stock you own, you are
paid a portion of the company’s profits.
Companies typically pay dividends on a
regular basis — usually every fiscal quarter. (four times a year)

For example: Johnson and Johnson, symbol (JNJ),
pays your .66 cents for every share you own
each quarter.  If you owe 100 shares of JNJ,
you get $66 dollars four times a year.
That equates $264 dollars a year.

You may be thinking that $264 dollars is
not much money.  However, when you start
putting aside money into dividend paying
stocks you will see amazing results in
the amount of income coming in.

Let me share with you, my start in the stock market.
I started investing at the age of 19. I did not have
much money to invest, so I had to started out small.
I turned my money over to a stock broker in Beverly Hills, CA.
He asked me how much risk I wanted to take. I said,
“I want to maximize risk.” He put all my money into
stock options. Options are much riskier than dividend
paying stocks.  Begin new and naïve, I did not understand
that investing in stock options, I would end up losing most of it.

After being christened into the stock market with
that experience, I closed my account and opened
one on my own. I took $1,600 which was all the
savings I had at the time and purchased 20 shares
of Microsoft right after the company was becoming hot.
That original invest keep growing and growing with
stock split after stock split. I still owe that investment
today that has turned into 640 shares after stock
splits and is worth $22,371. Microsoft is paying a .23 cent
dividend per quarter. That calculates to $147.20 every
four months automatically placed into my account.
The dividend payouts alone have surpassed the
original invest.

All you need are a few good performing dividend
paying stocks in your stock portfolio to change
your financial outlook. Take Apple computer for
example, I remember when it was trading around
$8.00 a share. Today, the stock is $440.00 a
share and pays out $3.05 in dividends per
share each quarter.  This is why guys like Buffet
and Rockefeller love what Wall Street can do for them.

That original Microsoft investment was one of many
smart decisions I made with the stock market. I have
made some very smart decisions and some not so
smart decisions in the market.  The market has been
up and it has been down. Fast forward to today, dividends
from major corporations is my major source of
income that has set me financially freedom.

Below are the advantages and disadvantages
of owning dividend paying stocks so you can make
a well-informed decision on investing your hard
earned cash in stocks that pay dividends. If you
are already investing in dividend paying stocks
then maybe it is time to give yourself a raise by
increasing your position size to maximize getting
those checks in the mail.

Advantages:
1. You can get started with just $500.00 by opening
an online brokerage account.
2. The money automatically comes into your
account without you doing anything.
3. Several companies increase their dividend yearly.
4. The stock can appreciate in price so you will be building
wealth at the same time.
5. You are participating in the profits of the company.
6. You are the owner of the company with voting rights.

Disadvantages:
1. A company has the option to slash or suspend
the dividend.
2. The stock may appreciate at a slower rate than
a growth company that is reinvesting all the money
into growing instead of paying out to shareholders.

The one main disadvantage is that the company
can cut or suspend the dividend. This is
highly unlikely if you have a healthy company with
good leadership that has products and services
that continues to be profitable.  The key is to find
these healthy companies that have historically
paid dividends over the long haul, along with
other fundamental values that make it a good choice.

Now you can see why John D. Rockefeller had
a smile on his face when seeing his dividends
coming in. You will too by investing in dividend
paying stocks.   Next week, I will discuss how to
find stocks that are healthy to buy.  The three areas
I will be focusing on are dividend history, balance sheet strength,
and cash flow. Look for next weeks post to this blog.

To get more insight into finding winning dividend
paying stocks, listen to the Money on Your Terms Show,
this Thursday evening from 8:00-8:30 pm PST on
blogtalkradio.com. You can catch past shows from
the archives 24/7.

DO YOU STRUGGLE WHEN IT COMES TO MONEY?

Then Tim Mann is the affordable financial coach for you.
Look at it this way, if you see a personal trainer for your
body, a dentist for your teeth, and a hairstylist for your hair,
doesn’t it make sense to see a financial coach for the
money that pays them all? Tim has the tools you need to
fix your financial problems, eliminate credit card debt,
plan your retirement, build wealth, conquer tough
financial situations, and obtain the financial independence
you always wanted.

Call (818) 292-2548 NOW to get your FREE introduction
to affordable financial coaching.

Remember when it comes to your money,
it’s on your terms and no one else’s terms.

Tim

 

This blog is for educational purposes only.
All readers are advised to conduct their own
independent research into investing in individual
stocks and financial markets. Financial markets
involve risk. Past performance does not guarantee
future results. You should not rely on any past
performance as a guarantee of future investment
performance. Unit values and investment
returns will fluctuate.

 

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