The point of dividend investing + 8 dividend stocks worth looking into
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Weekly Market Update 🗒️💡
4 Stocks on the move this past week
FedEx (FDX) shares were up 11.6% this past week as its earnings report beat expectations.
Credit Suisse (CHF) shares were down 4.1% this week after its largest investor announced it would not provide funding to the bank. The bank is also being purchased by Swiss banking giant UBS for 3 billion Swiss francs ($3.23 billion). Swiss president said that this takeover was needed to establish confidence in the Swiss financial center.
Nvidia (NVDA) shares were up 2% after getting an upgrade from Morgan Stanley who cited growing tailwinds from the push toward artificial intelligence.
Bumble (BMBL) shares rose 1% after Citi Bank upgraded its rating to “buy”.
Index performance:
Tweet of the Week
The Point of Dividend Investing…
I’ve been dividend investing for 7 years now and in that time I’ve come to realize the whole point of this investing strategy.
In this post, I’m going to break it down for you. I’m going to share exactly why I think dividend investing is the best strategy for me, and maybe you can relate.
Before I begin, let me reiterate that I’m not saying dividend investing is the best strategy for you. But I hope the rest of this post at least helps open your mind to the power of cash flow.
Let’s begin.
When I first started dividend investing, it was so underwhelming. Here I was, an 18-year-old kid earning $2.50 a month in dividends. It’s tough to see the light at the end of the tunnel when all you can afford with your dividend income is half a coffee at Starbucks. The early stages really make you doubt if it’s truly worth it.
But as the years passed, I started to realize something important about this investing strategy.
I was making money to be invested in the stock market.
And I’m a long-term investor.
Wait a minute… this was all starting to make a little bit more sense.
You’re telling me that I can get PAID to be invested in the stock market? If my money is going to be tied up in company stock or funds anyways, why wouldn’t I want to earn some extra coin along the way?
I started to realize that dividend investing wasn’t about the amount of dividend income you’re earning today. It was about the dividends you would earn 5, 10, 15 years down the road.
I started researching the compounding effect and became absolutely obsessed with it.
You mean to tell me the $2.50/month in dividends I’m earning now can be reinvested to earn me more money the following month? and the month after that?
This was my thought process:
The dividend income I “earned”, which wasn’t “earned” because I didn’t work for it, could then be reinvested to “earn” me more?
Essentially the whole point behind dividend investing was making money with money that wasn’t even yours to begin with.
My mind was BLOWN.
I quickly realized that I didn’t even have to use my own money to make more money. Although contributing to my accounts would help grow my dividend income even quicker and I suggest you consistently contribute whenever you can.
But this passive income could just grow on itself. In the background. While I go about my day. Hang out with friends. Go on vacation. Clock into work. Work on my business. All this money is just constantly working FOR me. Like my own little employee who never sleeps.
That’s when I thought to myself, why can’t I grow this large enough to one day cover all of my living expenses?
The reason we work 9-5 jobs is to support ourselves and our families with basic living expenses like food, shelter, and perhaps any luxuries if there’s money left over. But at its core, a job is just a way to survive. We need to make money somehow.
My next thought completely changed my mindset about how money works.