Stop in for a cup of coffee
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Thanks Chris. Sounds like fun and learning without the risk.
It is. I was very skeptical and nervous about trying what I learned in real life, but I finally did this year and so far so good. I’m putting 200 a month into a variety of monthly dividend paying stocks, all solid companies that are off their 10 year averages a little bit but not hurting. (This is where understanding balance sheets really really helps). Anyway, Etrade let’s me automatically re-invest those monthly dividends into more of the stocks. So it compounds.
Right now, I’m up to about 110 dollars a month in dividends being reinvested. I’m only up 4.82 percent in my portfolio and a couple of the stocks are down a point or two from when I got them. But the dividends strategy isn’t so much about the stock price gain per day as it is about a renewing revenue source. I chose companies that have a solid history of monthly dividends payouts.
For example, one such company hasn’t missed a monthly payment of dividends in 381 months. That’s a bit over 30 years. They pay 2.00 bucks per share per year, so 2.00/12 times the number of shares is what they pay per month. there’s others that pay way more but generally the higher the dividend percent, the more risky.
Oil companies generally payout the highest percentages along with investment companies. I’m in one that is my riskiest, but they pay 58.6 cents per share per month. As a share price of 8.90. They’ve got just 86 months of consecutive payments but their debt to income in only 11 percent. It’s a fracking oil transport company. But it only has maybe 15 percent of my contributions tied up in it. And I check it twice a day cause it has me so worried.