Top 2 Ways to Invest Your Money and Build A Good Life

Keeping your money in the bank for long is not a wise thing to do. However, the majority of people are guilty of this. Their reason? It’s risky putting your money in investments. Our verdict: Nothing can be farther from the truth.

In this eye-opening post, we took the pains to demystify every bottleneck that has been denying you the joy of seeing your money work for you. Bury your head in the details and see for yourself.

Table of Contents

1. What Is Investment Brokerage?
2. How Safe Is Investment Brokerage?
3. Tips For First Time Stock Investor
4. How Dividends Investment Works
5. List it All 46 Dividend Kings
6. How to find stocks with ‘safe’ dividends
7. Setting Up A Business That Makes Money Daily
8. Conclusion

What Is Investment Brokerage?

Investment brokerage is the buying and selling of financial securities, such as stocks, bonds, mutual funds, and other investment products, on behalf of clients. Investment brokers, also known as stockbrokers or financial advisors, act as intermediaries between investors and the financial markets.

The role of an investment brokerage firm is to provide a platform and services that enable you to participate in the financial markets and execute investment transactions.

How Safe Is Investment Brokerage?

Investment brokerage, when conducted with reputable and regulated firms, is generally considered a safe and secure way to participate in financial markets.

You will have nothing to worry because the industry has robust regulatory frameworks and practices in place - such as the Securities and Exchange Commission (SEC) - to protect your money and ensure the integrity of transactions.

Tips For First Time Stock Investor:

Investing in stocks that pay a dividend is like buying future income. Anyone can do it and you can start with as little as N1,000 or $1. With dividends you get paid just for being a long term investor. Isn’t that a flex?

How Dividends Investment Works:

Dividends are a way for publicly traded companies to share a portion of their profits with their shareholders.

If you own stock in a company that pays dividends, you’ll basically get paid passive income just for being an investor.

You can see how much a company pays out by looking at the stock information.

Let’s use $HD as an example here and we’ll explain what each bit of information means:

Dividend ex-date is when shares need to be purchased to be eligible for that payout period.

Dividend pay rate is the amount you’ll receive per share for the quarter. Dividend pay date is when the money will be received.

Annualized Dividend is the amount paid per share per year.

But let’s keep our focus on Dividend Yield. The amount of dividends paid out per share is determined as a numerical value (currently $2.09 for $HD) not a % based value.

The yield % on a stock or fund is always changing as the stock price rises and falls but the dividend remains the same.

Many companies also decide to increase their dividend payout amount over time.

As they generate more revenue, they can share more of their profits with shareholders via a higher dividend payout.

Holding dividend stocks long term can be extremely beneficial to investors. Companies that have increased their dividends for 50 years straight are called Dividend Kings.

List of all 46 Dividend Kings:

How to find stocks with ‘safe’ dividends:

Dividends can be taken away if the company gets in financial trouble. To reduce such eventuality, look for companies with:

• Strong cash flow
• Increasing revenue & profits
• Sufficient cash reserves
• High demand for products/services
• Low debt-to-equity ratio

It’s not just stocks that pay dividends.

Certain ETFs (like index funds such as $VOO or $QQQ) pay out a dividend as well. There are also ETFs specifically designed for dividend investors that pay a higher yield than average stocks and funds.

The most important part of dividend investing is allowing them to compound over time. You can do this by setting up what’s called a dividend reinvestment plan (DRIP).

DRIPs set up your dividends to automatically be reinvested into more shares of the stock or fund paying them.

Reinvesting your dividends means that each time you receive them, you’re being paid more money than before because you own more shares of that stock or fund than you previously did.

These reinvestments compound greatly over time and cause a drastic difference in your returns.

Setting Up A Business That Makes Money Daily:

Knowing the kind of business to start on the side as a way of building a good life for yourself and your family is one thing, getting the location right is even more important. You can load goods in a big shop and watch it rot away due to poor patronage as a result of wrong location.

Setting up a business that makes sales on a daily basis is one of the wisest decision you could ever make when starting out to invest your hard earned money. Do this well, especially at the right location, and watch your dreams become reality faster than you could ever have imagined.

Conclusion:

The compound effect on dividends reinvested over time combined with capital gains will help you to reach a point where you make more in dividend income than you do at your 9-5 job. Starting your own business after a diligent research and employing the right staff is slam dunk.

That’s the end goal. To replace your salary with passive income and for work to become optional.

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