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Top eight reasons why you should invest in dividend paying stocks

Top eight reasons why you should invest in dividend paying stocks

1. Dividends equal effortless money
Aside from taking the time to actually purchase the dividend paying stock, the resulting dividends equal effortless money. Some stock brokerage firms whether online or offline charge a commission fee when purchasing or selling stocks (also known as trades). After you have made your initial dividend paying stock purchase it is time to sit back and listen to the steady sound of dividends being deposited into your brokerage account.

2. Constant revenue stream
When investing in dividend paying stocks, it is comforting to know that there is a constant revenue stream that goes straight into your brokerage account. Once the dividends reach your brokerage account, you are then able to withdrawl those effortless funds into your bank account or even set up an automatically withdrawal of your deposited funds back into your bank account each month. Dividends are like getting a social security check even before you retire.

3. Monthly paying dividend stocks
Some stocks pay you a monthly dividend. Such as REIT’s (Real Estate Investment Trusts) and Healthcare stocks. These stocks tend to pay you more during your initial dividend investing career; however, these stocks are typically more volatile then the quarterly paying stocks. During my initial dividend investing career, I honed in on monthly paying dividend stocks first as getting paid twelve times a year versus only four times a year is just down right cool.

4. Quarterly paying dividend stocks
These stocks typically pay less up front by having a lower dividend yield; however, during the long haul, they end up paying more due to a more stable compounding interest on yields and the overall higher financial strength of the company. These stocks tend to be less volatile during market fluctuations. Many big named companies tend to payout dividends quarterly rather than monthly. I tend to focus on both monthly and quarterly paying dividend stocks to have a decent variety of dividend yields and growths.

5. Employerless sick pay
Dividends pay you even when you are not working. You might be unemployed. Or maybe you were fired or recently let go from your previous job. If you have invested in dividend paying stocks you still have a career and a constant money stream trickling into your pockets.

6. Emplyerless vacation pay
Some employers allow their employees to take vacation time or time off without pay and still have a job when they return. Well with dividend paying stocks you get paid during your vacations and during time off even without pay from your employer. Dividends don’t care whether you are sitting at home playing video games or working at a secular job. Dividends pay you regardless of your job status.

7. DRIP (Dividend ReInvestment Plan) opportunities
The DRIP dividend reinvestment plans that many stock brokerages offer tend to speed up the compounding affect of yield interest. Allowing you to make more money by automatically purchasing commission stocks commission free and earning you an exponentially growing dividend payout each month or quarter. If you plan on purchasing a particular stock from an online stock broker that charges a commission fee per buy, then by opting into a DRIP dividend reinvestment plan, you are able to automatically purchase more shares of that same stock without paying a commission fee at all.

8. Dividends don’t care about your current job status
Whether you are employed by a fortune 500 company, working at a fast food joint, or maybe you are simply investing in dividend paying stocks as a hobby. Dividends could care less about what you do as they continually provide a steady stream of income into your pockets. Maybe you are a landscaper or are struggling to find a new job since you just got laid off from your previous one. Maybe you are working a part time job since you were unable to get hired full time somewhere else. Since you have invested in dividend paying stocks, you are getting paid even as you read this article.

Disclaimer: I am not a stock market professional. Always seek professional help when choosing to invest into the stock market.