Dividend Investing! – Dividend Stocks!

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Good day subscribers thank you so much for joining me today i am jeremy this is a financial education channel and today we are talking about dividends so today what i’m going to do for you guys is i’m going to break down what a dividend is very simply so you can understand if you’re a beginner and you do not know what a dividend is second today i’m going to go

Into the philosophy of why companies paid out dividends versus not pay out dividends i’m going to also tell you how you can make a living from just earning dividends and lastly i’m going to show you two examples of two different companies that pay out dividends and we’re going to go over and look at what type of yields they pay and where what they paid in the

Past versus now and things like that so first what is a dividend a dividend very simply is money that is paid out from the company that you own stock in to you directly as a shareholder and you can do whatever you want with that money you can pull that out of your brokerage account once it gets paid out and go spend it on whatever you can invest that money again

You can do whatever you want now something you need to understand with dividends is you do pay tax on dividends so whatever the company pays out to you you you usually pay a 15% tax on whatever they pay out to you which is kind of nice because that’s a much lower tax rate than most people pay most people pay between 20 and 30 percent tax on the income on your

Income that you get from your job or your business or whatnot versus a dividend you only have to pay fifteen percent unless you earn over four hundred thousand dollars a year then you pay twenty percent so still not a massive amount of money but needless to say you do need to pay your tax on that money that’s what a dividend is very simply now why do companies

Pay out dividends and why do some not pay out dividends well the general philosophy is if you pay out dividends in your company that means generally speaking you’re slower growth you have lower growth so that could potentially be a downside because faster growing companies generally want to hold on to their money to invest and invest in this and invest in that

So if you ever notice the high-growth companies they almost never pay dividends because they want to use that money toward you know building up the business building up the business now the good thing about companies that do pay dividends is generally they’re very safer companies don’t generally speaking pay out dividends unless they’re very confident that their

Future profits are going to be at least as good as they are now if not better their growth might not be as stellar as some of these names that don’t pay dividends but at the same time they’re very comfortable in their financial position they know they’re going to be making those profits in the future they know that their balance sheet is strong so they can afford

To pay out these dividends to shareholders and whatnot so that is basically the philosophy side of it now how do you make a living from basically just dividends well number one key is you need to have a substantial amount of money saved up to invest and get back in dividends so let’s say you have a million dollars invested in a company if that company just pays

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A 2% yield per year most companies so you know pay between that pay dividends pay between a 2% and a 4% yield per year meaning so if you have a million dollars invested in that company and they pay you a 2% yield that’s $20,000 that gets directly deposited into your account over the course of the year generally they divide it up into four different times a year

The first quarter second quarter third quarter and fourth quarter so they pay them generally quarterly so you’ll get 5,000 5,000 5,000 5,000 each time if it’s a 2% yield if it’s a 4% yield and you have a million dollars invested then you’re getting 40,000 dollars per year because 4% of a million dollars is $40,000 so that’s pretty beautiful you can live a decent

Modest lifestyle with $40,000 a year and you’re only paying 15% tax on that now let’s say you have 10 million saved up now of course 10 million is going to be very hard to save up unless you made several successful investments in your 20s and your 30s and your 40s and or you had a business that was successful or you work really high up in a nice company something

Like that but let’s say you have 10 million now at a two percent yield you’re getting two hundred thousand dollars per year at a four percent yield you’re getting four hundred thousand dollars in basically free money four hundred thousand dollars so you can see how you can live a very nice lifestyle if you have a decent amount of money or i shouldn’t say decent

If you have quite a bit of money saved up and then you invest in and dividend stock and then you don’t even really care that much you know if the stock goes down a little bit or up a little bit because you’re just holding the stock collecting those dividends each year which those dividends as long as you invest in a good company are probably just going to go up

And up they’re probably just going to raise those dividends over time and if you have leftover money from the dividends that are paid you can just go and invest that in more shares the more shares you have then the more in dividends you get and then if they’re raising it it’s like a double whammy so you can certainly make a living off of just investing in dividends

Just the key is that you need to have quite a bit of money saved up at least a million to ten million dollars and then you can see how rich get richer as they say imagine having a hundred million dollars and getting a four percent yield per year that’s four million dollars and you didn’t have to do anything except stick your money in that stock that’s pretty sweet

Anyways let’s move on so next up on your screen now you should see apple corporation so we’re going to go into a little bit about what companies pay for dividends and those kinds of things on your screen at the very bottom right now i’m on yahoo finance just so you know this is yahoo finance and on the bottom right hand of the screen you see a part that says div and

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Yield that means a dividend in the yield so apple pays out two dollars and 28 cents per year in dividends that equates to a to just over a two percent neil because if you divide to 28 by 114 which is a share price that’s around two percent so you’re getting about a two percent yield per year from apple just for holding the shares not bad now well let me go into

That now we need to go ahead and see on here we have apple’s dividends they have paid out now apple did not pay out dividends for longest time they did not pay out dividends for longest time as you see on your screen there mm they didn’t pay any 2005 didn’t pay any uh that was just doing stock split so they didn’t pay out dividends for pretty much ever up until

August 9 2012 that was the first time they really paid dividends they paid out a 37 cent dividend and you can see after that they started beginning to pay quarterly dividends and then what happened the next year the next year they raised it to 43 cent dividend per year and then you go up and you see from multiple quarters that it’s 43 cents and whatnot then they

Pay they bumped it up in may 2014 as you see there to a forty seven cent dividend and then the next year they bumped it up to a fifty to send dividend and now they’re up to a fifty seven cent dividend and apples profits are generally just going up so over time they’re just going to keep paying out more and more to their shareholders more than likely so you can

See the power of a company is very profitable like apple and they’re still paying out hardly any of their money to dividends because they make way more than what they’re paying out in dividends so you can see the power of dividends there now of course apple matured as a company around that 2012 mark they stopped growing at such insane rate in their growth rate

Slowed so at that time tim cook the ceo he felt like it was time to start paying out dividends because they’re a safer company now he had so much cash on the balance sheet the growth was starting to slow down a little bit so let’s start in incentivizing shareholders to invest with us because we pay out a dividend it’s just another name to the game let’s go ahead

And look at win now when all the way in the bottom right there you see they pay out two dollars per year in dividends that’s around a two percent yield also coincidence the same as apple now with when let’s go ahead and go onto the next page here and you will see that they have a lot of random numbers there you see a lot of different numbers so in 2006 he paid out

A fat dividend a fat dividend only once that year it was six bucks the same thing next year he paid out six bucks him i mean steve when the owner of the company 2009 he paid out $4 so as you see 2008 he paid out no dividends that’s a little inconsistent then we go up to 2010 he paid out 25 cent 25 cent and then another super fat juicy dividend in 2010 $8 look at

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That 8 dollars he paid out an $8 dividend are you kidding me then we go up 2011 57 57 50 cent and another juicy dividend $5 so you see a stock like when holy smokes can you make a lot of money just off dividends because he’s paying out a lot of these dividends as you go up the list there he’s paying a lot out a lot of them quarterly but then he’ll also pay a lot

Of them out yearly so he’ll pay quarterly dividends and then they’ll do what’s called a special dividend a special dividend is just like a one-time dividend it’s just one shot for the shareholders hey we’re in a payout this amount of money to you guys per share and it’s just a one-time thing it’s not like a normal annual thing like you know a regular quarterly

Dividend is like the 50 cent’s he pays out nowadays a 2015 2016 you see he pays out 50 cents a quarter so but you can see there’s multiple times over the years that he’ll just pay out a random look at that november 5th 2012 another $8 dividend $8 $8 per share you’re getting imagine own a thousand or 10,000 win shares and you get an $8 dividend forestall the

Quarterly dividends you got that year as well so you see he is very generous with dividends and paying out that money so that basically is dividend that is dividends very simply explained at the beginning and kind of taking you guys through how you can make a living from it and also taking you into the philosophy on why companies pay dividends why some don’t in

Those kinds of things and then now you get to see and by the way if you’re looking at dividend stock chart charts like this that i showed the last chart there if you want to see something like that you can just go to yahoo finance click historical prices it’s going to be on the left side of your screen historical prices and then go ahead and click on a tab that

Says dividends only it’s kind of toward the middle of the screen and you’ll be able to click dividends only get prices and then boom it will pop up there and i’ll show you hey you know here’s all the dividends that they’ve been paid over the last few years and whatnot so you can see that for every single company that pays dividends if they pay dividends the ones

That don’t there’s nothing going to show up there because they don’t pay dividends so anyways thank you so much for watching this guy’s i hope this was immensely helpful in you understanding dividends and the dividend process thinking and all those kinds of things if you haven’t subscribed you may want to i took a ton about personal finance talk about business

Entrepreneurship i’m a young entrepreneur i give a lot of tips as far as that goes and i talk a lot of stock market related videos like we did today explaining things and those kinds of things so subscribe if you have not and thank you for watching guys have a great day you

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Dividend Investing! – Dividend Stocks! By Financial Education

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