Hey: what's up everyone, this is matt. If your goal like mine is to achieve financial freedom, then you should consider the importance of passive income. You can generate passive income in many ways, but one of my favorites and the one i'll be discussing in this video is dividend investing. This will not be a hardcore business analysis of dividends, but rather a conversational introduction to what dividend investing is how it works and how it can help you on your journey to financial freedom.

If you're interested in this type of content subscribe for more, the support is truly appreciated. Now sit back, relax and enjoy dividends are payments that a corporation makes to its shareholders, which would be you not all. Stocks have dividends, but when you own one that does you are being paid a portion of the profits generated by the company, to put it simply, you are being paid to own a stock. This means dividend investing can create a source of regular income for you.

In addition to the growth of your stock portfolio, typically companies pay dividends quarterly, as in four times a year, but this isn't a set rule. There are a handful of companies that make dividend payments monthly. When you receive a dividend payment, you can put that money to work, so it earns you even more. Some companies have a dividend.

Reinvestment plan, also known as a drip. A drip allows you to reinvest your dividends to buy additional shares rather than being paid out. I personally love this methodology, because your investment compounds and all you have to do - is watch it grow. Now that you know the basics of what dividend investing is and how it works.

I want to offer you some tips tip number one dividend. Dividend-Paying stocks are still stocks. What i mean by this is that stocks carry an inherent risk because they can go down in value. When you look for dividend stocks to invest in, don't simply buy ones that have the highest dividend, payments make sure you fundamentally believe in the company.

You should think of dividend payments as a bonus on top of having equity in a high quality company. Tip number two. Consider dividend safety, dividends are dynamic, not all companies, pay dividends and the ones that do can change how much they pay. In worst case scenarios, companies can decide to stop paying dividends altogether, which is why you need to consider dividend safety.

You should seek out companies that have a history of stable income and cash flow. Ideally, you would invest in a company that has a precedent of raising its dividend, payment, i'm in no way affiliated with them, but i like to use simply safe dividends. It's a great resource for better understanding. The quality of a company's dividend.

Tip number three be consistent from my own experiences with dividend. Investing i can tell you the stock values of dividend-paying companies, don't always grow as much as you'd want them to most of the time. These companies are large, established businesses, i'm not saying they don't grow at all, but they typically do not sustain. The same stock returns witnessed on their way to becoming a massive corporation.

Sometimes they can even underperform the overall market dividend. Investing and growth. Investing are two different things and should be treated accordingly. If you don't see positive results right away, you shouldn't ping pong between investment strategies.

Success takes time erratically. Changing your style is a surefire way to lose money. Trust me: i've done it if you're interested in both dividend and growth investing, i would suggest using two different trading accounts. I personally use two different accounts and it helps keep my mindset straight for both of the investing styles bonus tip tax benefits.

Before i continue, please do your own research. Trusting a random guy on youtube is never a smart idea anyway. Another positive aspect about dividend: investing is the tax rates dividend income from certain qualified stocks are taxed at a lower capital gains tax rate. For obvious reasons, you should talk about this with a financial advisor, but i wanted to include it because it might be able to save you money.

I strongly feel dividend. Payments are a great source of passive income relative to other forms of passive income, such as rental properties. The barrier to entry is much more financially reasonable. What are your thoughts on dividend? Investing as a form of passive income? Let me know in the comments below i hope you found this video to be insightful if you enjoyed it.

Do me a huge favor and hit the like button. Good luck with your journey to financial freedom and, as always, may the odds be in your favor.