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Can you earn $4000/year in dividends with only $25K invested?

Reading time: 4 minutes

How can you earn $4,000/year with only $25,000 invested? If the average dividend yield for blue-chip stocks is around 2%, a quick calculation would tell you that you need at least $200,000 in order to make $4,000/year in dividends, here's the quick math:

$200,000 x 2% = $4,000

Therefore, how can you earn $4,000/year with only $25,000 invested? Keep reading on how this is possible.

Two things are important
When it comes to dividend investing two things are important:

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Why invest in dividend stocks?

 

woman dividend investorReading time: 4 minutes

Why are dividends important? Why do we focus so much on dividends? Dividends provide you with an immediate return on your investment while you hold on to your dividend-paying stocks, regardless of what happens to the stock price. Dividends are paid in cash to shareholders, you can spend your dividends or reinvest them into other dividend-paying stocks.

What is dividend yield?
For example, if a stock is trading at $30/share and the dividend is $1.50/share your divide…

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How do you know when a stock is priced low?

Reading time: 3 minutes

Stock prices go up and down all the time. Everyone has heard the phrase "buy low and sell high". How do you know when a stock is priced low (on sale), and why should you "buy low"?

stocks on saleHow do you know when a stock is priced low?
I've created a short video that shows you how to quickly determine when a stock is priced low (undervalued). You can watch the video here on my Youtube Channel.

Why should you buy low?
Let's say a stock is priced low at $15 and priced high at $65. …

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Should you stay away from companies with high debt?

Reading time: 3 minutes

Would you lend money to a friend who had little income and was swimming in debt? Of course not, because the likelihood of you getting your money back would be extremely low. The same is true for investing in companies which have high debt.

high_debtWhat's wrong with high debt?
A company with high debt is going to have a hard time paying back its loan if the economy starts to tank. Companies with high debt will have a difficult time surviving downturns. We know from experience t…

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Think you need lots of money to start investing?

You don't need thousands of dollars or millions of dollars to get started with investing. Just investing $10 a day could result in eventually earning over $31,000/year in passive income (dividends) and a stock portfolio worth over $1M.

Why do I need time and money?
In order to become a successful investor, you need time and money. The more money you have to invest the more dividends you can earn, and the more time you have the more you can reinvest and take advantage of compounding. Having bot…

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6 Bank Dividend Increases in One Week

Six Canadian banks recently announced dividend increases and share buybacks within the first week of December (2021). Continue reading to learn why they announced the dividend increases, and how this news impacts you as an investor.

Why did they increase dividends?
In November 2021 Canada’s Office of the Superintendent of Financial Institutions allowed the country’s banks and large insurers to resume dividend increases and share buybacks, undoing measures put in place in March 2020 to protect …

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What is Real Total Return?

In the last 6 months (May to November 2021) the Dow has gone from 34,756 points to 33,290, then up to 35,625 and then dropping to 33,843. What does this all mean? Stock markets are cyclical and it's impossible to accurately predict which way the stock market will go.

Markets are cyclical
This fluctuation is normal, many believe that the market is still high, and further declines are coming. I’m not going to make any predictions, in fact no one can accurately predict where stock prices will go.…

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Learn how this couple makes $30,000/month in dividends

Is it possible to live off dividends alone? Can dividends eventually cover your living expenses? The answer is yes and yes. This month I share with you a story of a Canadian couple earning $360,000 per year just from dividends.

$360,000/year in dividends
My friend Bob, the financial blogger from Tawcan.com, recently interviewed a couple on his site that are today earning $360,000 each year from dividends. Head on over to Bob's site to read this fascinating two-part series:

Living off dividend…

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Why do people invest in lousy companies?

Why do people invest in companies that are not financially healthy? I recently received this question from a reader, and today I'll answer that question.

What makes a company financially healthy?
A financially healthy company is one that is consistently profitable, has low debt, consistently increases shareholder value, sells a great product or service, and a number of other factors. To keep things simple, I created the 12 Rules of Simply Investing to help you determine if a company is a quali…

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Don't lose 65% of your orginal investment to fees.

When it comes to investing, everyone knows you can make money from collecting dividends and from stock price appreciation. But another way to earn more is to reduce or eliminate the amount you pay in fees, in your mutual funds, index funds and ETFs. Over time fees do add up and they take away a large portion of your investment....in some cases 65% of your original investment.

Why the fee?
All funds carry a fee, it's know as an MER (Management Expense Ratio). The MER includes the management fee…

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