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KCRoyalBlue
Arkansas State Fan
Member since Nov 2020
265 posts

Advice on dividends?
I'm very much a newbie to the market outside of my company 401k, so bear with me.

After a conversation with a former coworker of mine today, I'm extremely interested in trying to set up a schedule of dividends that pay out monthly or quarterly. He's invested in relatively stable stocks that have been providing a steady stream of income for him. Unfortunately I don't get to see the guy too often, so he basically created a lot of curiosity on my part.

Can someone explain how something like this works? How do you actually set this stuff up? He said that he used M1 Finance.

Can someone shed some light?


down time
Member since Oct 2013
842 posts

re: Advice on dividends?
High Dividend ETF


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90
Thecoz
Member since Dec 2018
1273 posts

re: Advice on dividends?
Look at some good companies
Look at when they pay their quarterly dividends
Buy they companies that offer the dividend you want and ladder them

I have rdsb..xom…chv .Abbie…efc ..bti..mo...ko….bz..wfc (will have dividend again soon )….and others…no set schedule I work year to year…

You can by a dividend index fund but they tend to reinvest as opposed to dropping cash into a set account like a monthly payday…

Btw…you are very smart to be planning like this …


UncleLester
West of the Mississippi
Member since Aug 2008
2652 posts

re: Advice on dividends?
Buy Coca Cola (KO) before June 14th and collect your first quarterly dividend on July 1st.

The dividend is currently at 0.75% a quarter based on the current Share Price he holding.

Compound that interest and it comes to 3.03% a year.

I am not the brightest guy, so this may not be the best advice, but I always like having about a 20% slice of my portfolio in a conservative stock like KO that collects a quarterly dividend.


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21
Jibbajabba
LSU Fan
Louisiana
Member since May 2011
3468 posts

re: Advice on dividends?
In general terms, as a young person, the strength of a dividend stock is that the dividends they produce can be reinvested back into stocks. This produces growth over the course of a lifetime and you end up with way more value when you get older. If you take the dividends and spend them like a form of income, they don’t have a chance to compound. Sure, that money is good to spend now, but that $1 now could be worth $500 in 30 years.

Dividend stocks are a healthy play because ,again I am speaking in general terms, the stocks that issue them are healthy companies and are typically stable.

That being said, as a young person, it is generally accepted that you get more value in the long term investing in growth stocks. That same dollar we talked about earlier might be worth $500 in 30 years with dividend stocks, but it would be worth $1000 if you placed it in a growth stock and let it sit for 30 years.

Dividend stocks shine when you have a large portfolio of them and you use their dividends as a source of income later in life, such as retirement.

A healthy portfolio for someone that is young absolutely can have a few dividend plays in it. But again, you would probably be better served re-investing those dividends back into your portfolio instead of pulling and spending them.

ETA: I used the word “generally” a lot. There are specific strategies that some people use that are very heavy in dividends. It is just one type of strategy in a sea of different strategies.
This post was edited on 6/10 at 7:20 am


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110
Fat Bastard
Boston College Fan
Member since Mar 2009
53335 posts

re: Advice on dividends?
READ THE STICKY THREAD!!


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35
slackster
Stanford Fan
Houston
Member since Mar 2009
73388 posts

re: Advice on dividends?
Are you going to start drawing the income or will you reinvest?

Be wary of yields that are “high” - it’s typically for good reason.


Bestbank Tiger
Premium Member
Member since Jan 2005
58530 posts

re: Advice on dividends?
quote:

Be wary of yields that are “high” - it’s typically for good reason.


Just look under the hood. Are the yields high because the stock price is artificially low (like the pandemic, but other events could cause that) or because the stock is volatile or is in a sector activist investors hate (oil)?

Or are they high because the company is in trouble and they're using a high dividend to entice investors?


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30
tirebiter
LSU Fan
Member since Oct 2006
7260 posts

re: Advice on dividends?
quote:

You can by a dividend index fund but they tend to reinvest as opposed to dropping cash into a set account like a monthly payday…


It doesn't matter if it is a fund, ETF, or individual stock the account owner chooses whether to reinvest back into the original investment or have the cash deposited into the cash account. OP, you should consider starting with a dividend fund or ETF and learn more about investing then move into with individual stocks if desired. You don't want to own a lot of very small $ holdings of individual stocks, it can become a PITA to track them and not worth the effort.


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USA
Member since 2001
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SouthMSReb
Ole Miss Fan
Member since Dec 2013
2815 posts

re: Advice on dividends?
I made my own “Dividend ETF” on M1. I have 75 different holdings in there and contribute $200 per week. It’s done well so far and it’s always fun when a company announces an increase.

If you’re newer and looking for a dividend ETF, I’d suggest either DGRW (pays monthly dividends too) or SCHD (quarterly).


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30
King
Arkansas Fan
Deep in the backwoods
Member since Sep 2008
17264 posts

re: Advice on dividends?
When you figure it out let me know hooker


KCRoyalBlue
Arkansas State Fan
Member since Nov 2020
265 posts

re: Advice on dividends?
I should probably let everyone know that I'm 47 and have about another twenty working years left. Or at least that's the goal.


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eng08
LSU Fan
Member since Jan 2013
4917 posts

re: Advice on dividends?
I like GSRLX

Rising dividend fund, companies have stable or increasing dividends.


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FLObserver
LSU Fan
Jacksonville
Member since Nov 2005
9374 posts

re: Advice on dividends?
Some Stocks,ETF's and Fund Symbols that have some good monthly,Qtr Divs. Your welcome
PDI
MO
NLY
BX
IRM
O
SRLP
SUN
VZ
WPC
BST
GOF
XLE
NUSI
QYLD
RYLD
MLPA
JEPI
This post was edited on 6/10 at 8:18 pm


KCRoyalBlue
Arkansas State Fan
Member since Nov 2020
265 posts

re: Advice on dividends?
Thanks so much to all of those caring enough to share advice!


lsuconnman
Troy Fan
Baton rouge
Member since Feb 2007
1993 posts

re: Advice on dividends?
IRM is out of control. It’s almost doubled in the last year and it pays 6%.


breamking
Member since Jan 2018
101 posts

re: Advice on dividends?
I have been buying so since i was 19 years old. Reinvest my dividends and sold the mirant when they gave me that for free for a nice profit. It has been good to me. Started buying it in 1989.


KCRoyalBlue
Arkansas State Fan
Member since Nov 2020
265 posts

re: Advice on dividends?
Does anyone here use M1 Finance to invest?


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