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THE GUIDE TO DIVIDENDS:
Anytime you buy a stock, that entitles you to a small portion of that company’s profits – and, sometimes, those profits are distributed to you on a regular basis in the form of a dividend.
PROS:
-They’re somewhat insulated from the stock market.
For the most part, you know that you’ll get a predictable dividend payment – regardless of what happens with the market.
-Dividend Payments have also been less volatile than stock prices.
For example, the Simply Safe Dividends blog found that – from 1900 through 2018 – dividend payments remained fairly constant, with an average variance of +/- 10% during market downturns.
-Throughout Recessions – Dividend payments sometimes increase.
As Simply Safe Dividends points out, “in three of the above recessions…dividends paid to investors actually increased, including a 46% jump during the first recession following WW II.”
-Dividend stocks have been shown to provide a comparable return to the overall market.
https://www.hartfordfunds.com/dam/en/docs/pub/whitepapers/WP106.pdf
In fact, Fidelity found that dividends accounted for 54% of market returns during times when inflation was above 5%.
CONS:
-Dividends ARE NOT guaranteed.
Even though companies generally try to avoid cutting or reducing dividend payments, this does happen, and because dividends are often a reflection of a company’s profits, in the event of a downturn, they may chose to pause distributions until conditions improve.
-Dividend payouts mean nothing when the company itself declines in value.
In this case, earning 5% annually might actually LOSE YOU MONEY when the stock itself declines 30%.
-There can be tax disadvantages.
Unlike buying a stock and only paying tax when you sell, Dividends are taxed the moment you receive them – and, depending on your tax bracket, it could be as high as 20%, or more.
-Dividends could flat-out be “irrelevant.”
In this case, two well-known economists argued that – if an investor needs money – all they really need to do is sell the stock – and that, dividends don’t actually create any more value for the company itself.
From my perspective, though – MONEY ISN’T FREE, and even though you’re getting paid a dividend, that REALLY just comes out of the company’s cashflow that isn’t being re-invested to grow the business.
That’s why I think that the real benefit of “dividends” isn’t so much that they’re a better investment, or – that they’re superior to a stock that DOESN’T pay a dividend – but, instead – they give you the psychological benefit of receiving steady income, without the need to physically sell your shares to collect your money.
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What’s up gram it’s guy’s here 😂
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $260K for sometime now, my major challenge is not knowing the best entry and exit strategies… I would greatly appreciate any suggestions
I started investing in the stock market because of dividends. What matters, in my opinion, is that if you invest and earn more money in addition to dividends, you will be able to live off of dividends without selling. It implies that you can pass that on to your children, giving them a head start in life. I've invested over $600k in dividend stocks over the years; I continue to buy more today and will continue to do so until the price lowers even further.
Public kinda ass though
I love how all these YouTube financial gurus say you need millions to make x in dividends. When if you do your own research all you need is $500k and make $35k a year in returns or more
Someone say Dividend 5x as fast as you can
Man,that Ford GT in the background really stung ! I need to hit the lottery…..lol. Good video !
That's awesome that you showed the $500 bill. I bet you have $500, $1,000, $5,000 and $10,000 bills… after seeing your cool collection of old hundreds.
LOL first sentence whats up Graham is Guys here 😂🤣
Lol, so first – have a lot of money xD
Why tf do you move so much when you talk bruh chill out lol
Just noticed your intro "What's up Graham its guys here!!"
A dividend video with a magic trick? Don't dip into Andrei Jikh's market share! lol
It’s a very good video. I hope people listen: most won’t, which helps those that do.
Problem is you need money to make money… You need hundreds of thousands of dollars to make any reasonable amount of money yearly off dividends. Most people aren't sitting on 500k+ to just put into dividends.
no matter how many of these vids i watch im still confused. but this was probably one of the best ones yet. thanks for the info!
Whirlpool
Can dividends change based on a company’s performance?
I thought that there was a way to collect around that $82K mark per year tax free. What did I miss?
If you had 10k to invest with that what would it be and why?.
What's up Graham It's guys here? I can't be the only one that caught that but I don't see it in the comments.
Dividends suck in a taxable account. If you are young and trying to grow your retirement savings you are much better off buying non dividend yielding funds/stocks. Ben Felix has a great video about this topic.
Should have talked about the power of reinvesting the dividends back into your dividend stock in return compounding
That what’s up guys it’s gram here intro is slowly getting annoying
How many times did this guy say the word divident ?
Hi guys Graham here
Did seriously no one noticed he said what’s up graham it’s guys here
how come i just realized he said "hey graham it's guys here" at the intro
I recently inherited almost $500k. I REALLY need to make this money work for me, and not just disappear over time. I've been scrambling for somewhere to put the money, where I can make an effort to use the gains to pay bills so I can quit my job or should force early retirement. All roads have pointed to the financial market of some sort which is a good idea buh where else should I put money besides the financial market? We have a 13% RPI rate so cash is tough.
all this is on the premise you live that long which isnt gauranteed
Petal just started charging most members an $8 a month fee and plans to roll this out to all accounts by the end of summer. Just a heads up!
Super informative video. Havent watched your content in a while but this makes me want to watch regularly again
Thanks G
That's why I prefer companies that do share buybacks instead of high dividends. Tax advantages and stronger stock price growth.
You cannot cut your way out of recession you've got to invest your way out of recession, the Conservative party are in the dark ages on policy they've got to think again. My primary concern is how to maximize my savings/retirement fund of about £170k which has been sitting duck since forever with zero to no gains.
Loved the Andre joke
If you invest the dividends, would your return over time be higher?
"whats up graham its guys here"… did I hear that correct right at the beginning? 🙂
Considering the economic downfall and the rise in poverty across the globe. I ask; What is the best way to achieve financial freedom?
Graham, can you please make a video explaining this stuff like you would to a 5 year old?
Basically what you are saying is, if you have several million dollars invested in stocks, you're probably going to get a reasonable return passively. Not exactly earth shattering news.
"what's up Graham, it's guys here" 😂
Did bro just flex owning Nestle stock?
I feel sad that even though I am investing, I don't have the knowledge to dig through how each company is doing, is this a good time to buy stocks or not, my reserve of $450K is laying waste to inflation and I don't know what to do at this point tbh, I need solid data on market trajectory
"What's up Graham, it's Guys here"