Disclaimer

This blog is intended for educational purposes only. None of these posts are meant to give legal or financial advice. If you need advice you should consult an appropriate professional.

Tuesday, July 12, 2011

dividend stocks for passive income

The best way I can come up with to produce passive income is dividend paying stocks.  You buy the stock and collect the dividend.  Easy enough right?  I think a good way to look at this is aim to pay one bill with dividends like internet.  Once you have that covered then aim to cover another expense with dividends.  This technique takes time and money I might add.  You have to have capital to get a return.  So start small and build a dividend machine for financial independence.  There are many good companies that have raised their dividends for many years now.  That's a good way to go.  It's like getting a raise every year.  Now to totally live on dividends is challenging.  Let's face it that would take a lot of shares to produce enough cash to pay all the bills.  Maybe a good way to look at it is replace part of your work income with dividends to make you less dependent on a wage.  I mean any amount of passive income is better than none.  So take it one bite at a time and slowly build those dividends for more freedom.  There are other ways to get passive income like royalties, rent, annuities, pensions, and interest, but dividends are my favorite.  Anybody can do it.  It's very democratic now.  Another good thing about the companies that increase dividends is it will likely beat inflation.  I think it's beneficial to rely more on investment income and less on wage income over time.  This seems to be the natural course of things.  And don't think because you're only investing 50 bucks a month that it doesn't make a difference.  It does!  Any is better than none.  Remember that.  Start small, and stay small if need be.  This is just one idea of many to get off the treadmill.

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