a *secret* new way of reinvesting your dividends
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My name is Alex and I love creating streams of passive income. My goal is to help you do the same.
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What I’ve Been Reading: The Cade Invests Newsletter
A good friend of mine Cade, known on Twitter as Cade Invests, is the author of one of my favorite finance newsletters: The Cade Invests Newsletter. Each week, Cade sends out a newsletter with a quote, one investing or money-related topic and shares the best memes of the week.
In his last article History in the Making, he talks about the Nasdaq’s massive dip, how fearful the market is right now and what he’s doing in a market like this.
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Announcement
If you haven’t heard, I’ve recently made my entire portfolio public.
You can see my buys/sells, the allocation of my portfolio, how many shares I own of each position as well as my dividend income.
Tier 1 has 50 spots at 50% off and there are currently only 17 spots left!
After Tier 1 is done, we’ll move to Tier 2 where I will be releasing 25 spots for 25% off.
If you’re interested in getting an inside look at my portfolio, click below to claim yours 50% off.
a *secret* new way of reinvesting your dividends
We always hear the same words over and over again as dividend investors:
REINVEST YOUR DIVIDENDS
REINVEST YOUR DIVIDENDS
REINVEST YOUR DIVIDENDS
For most investors, this means turning on DRIP (Dividend Reinvestment Plan), reinvesting your dividends automatically and letting software do the work for you (thank you 21st century).
And this is by no means a poor strategy. It’s actually a phenomenal one. The less work you have to do the more time you’ll have doing the things you love most in this world. Automation is key. Especially when it comes to investing.
But after 7+ years of dividend investing, I’ve realized something extremely important: stocks go up and stocks go down.
I know, who would have thought?
But in all seriousness, that is the reason why I’ve developed a new method of dividend reinvestment. One that can help you take advantage of stocks going up, and stocks going down. To benefit from the rollercoaster we like to call the stock market 🎢
Here’s how it works👇
Let’s say you have 2 stocks, Stock A & Stock B.
Both stocks have a 5% dividend yield and are currently trading at $50/share.
Stock A pays it’s dividend this month on the 15th
Stock B pays it’s dividend next month on the 15th.
When the 15th rolls around and it’s time for Stock A to pay it’s dividend, you realize something… Stock B’s shares are down 20%! From $50/share to $40/share.
Here’s where the magic happens.
Instead of reinvesting Stock A’s dividend back into the same stock (trading at $50/share), you intelligently reinvest that dividend into Stock B so you can buy the same amount of income at a discount of 20% off.
Most people don’t think to do this because DRIPing your dividends back into the same stock is usually the most logical and mindless way to reinvest.