Dividend green flags 🟩 | #2
Today we talk about why I love dividends and you should too
Hey!!! 👋
Second post in two days. I hope I can post daily. In my first post, you saw I was using dividend growth investing for my retirement. There I talked about dividends in brief. In today’s post, I am going to go into detail about dividends and why I love them, and why you should too 😉.
Overview
⏰ Predictable cash flow
🦥 Passive investing
💦 Compounding effect
⏰ Predictable cash flow
Dividends are predictable (most of the time) and they provide me with predictable cash flow. The fluctuation in stock price doesn't affect dividends (most of the time). With other strategies like the 4% rule or selling stocks, it might fluctuate both ways. As an investor who depends on regular cash flow from investments, dividends give me higher certainty, and I love certainty. I have to build a dividend income calendar that predicts my monthly dividends with great accuracy.
🦥 Passive investing
I am involved in a lot of responsibilities from work and home. I also lack expertise in being a stock picker like hedge fund managers, although I have been learning more and picking stocks these days. Also, I don't consider myself smart enough to read the charts and time the trades. So, I love investing passively and try not to day or swing trade. Dividends have been the perfect solution for me. I can turn on my auto-invest option and set up a monthly recurring deposit to my brokerage and it will continue to spin the wheel.
💦 Compounding effect
Like I said in my first post, dividend growth investing is like buying a money-printing machine. I re-invest dividends in the companies that pay dividends, so I can get higher dividends in the future. Initially, it might look like a minuscule change, but in course of 5-10 years, the income generated relative to current investment will be huge.
Takeaways from this post:
Dividends are sexy
Dividends can compound
Why retire alone, when you can retire with friends! Share this post with your friends so you can retire together.👇🏽👇🏽👇🏽👇🏽
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