Most of us live relatively routine lives and that is a great thing, however we all tend to be a little different. We wear shoes, but next time you are with a number of people look around – most will have slightly different shoes. Some might be the same brands but the colours, the shapes will all be a little different. To me this indicates there is always opportunity in the marketplace and that is a good thing. When we think about our daily lives, we tend to do many of the same things, partly because it is the right thing to do. In investing in dividend stocks this is a very good thing.
For example when we turn on the lights in the morning, the utility that provides us with the electricity is consistent and many of us do it the same time each day. In investing one trick is to know who owns the company that provides us the ability to do routine or habit forming motions. When you brush your teeth – what company was it – in my household it is either Colgate or P&G, noting not a majority of income for these companies come from toothpaste or laundry soap or hair care, but enough does that you can form an opinion of whether the company is good or needs to improve. If the companies are not doing their signature products well, how do you think they are doing on their lesser brands?

Dividend stocks are similar to your habits, look at your daily habits, which companies affect you and are they on the stock exchange? Next ask you habits changing, if they are, maybe others are to. If your habits are not changing then steady it goes. Just by doing your routine things, you are evaluating the companies that provide it. As you change, so do other people and the companies. If you stick to the companies in your rountine that pay a dividend, you have a constant front role seat to evaulate how the company is doing.

There are always more questions than answers, till the next time – to raising questions.

One of the most important elements of investing is the risk factor – what risk are you willing to take to make a expected return. If you are near the mythical average person, you do not mind one or two days a year of high excitement, but for the most part, you live a relatively “boring” lifestyle. Noting there is a lot of good in your lifestyle, for societies to function, most of us spend many of our days within the boundaries of our lifestyle.
Having said the above, our investments should tend to reflect our lifestyles for the type we are looking for are high degree of safety, reasonably consistent returns, easy to manage, and a small degree of some excitement.

Dividends provide all the above – given the quality of the companies paying divdidends there is a high degree of safety; given dividends are consistent – paid every year; the companies are well managed and have a solid market share of their industry; the excitement is not everything is perfect.

The world turns which means something goes on every day – this year European debt has been highlighted, last spring was the Arab spring; and China’s economy is slowing. There are factors in the world which affects all investments. There is always something affecting investments every day or every month, but for the most part holders of dividends shares do not have to do projections to determine what could or might happen to their investments for as long as the dividend is paid, it is okay, if not sell.

Dividends provide all the above – given the quality of the companies paying divdidends there is a high degree of safety; given dividends are consistent – paid every year; the companies are well managed and have a solid market share of their industry; the excitement is not everything is perfect, however at the end of the day, holders can close their eyes and get a good night’s rest to prepare for another day and that is important.

There are always more questions than answers, till the next time – to raising questions.

There is a wonderful advertisement of someone enjoying the backyard hammock for the person does not have to worry about their investments. It is a half truth, but we are wish it was a full truth. On the stock exchange there are many companies trying to make money, the reality is most of the exchange do not – they are selling hope. Hope is something we all need, strive for, but it does not always pay the bills. There is a small group of companies who consistently make money and pay dividends, they also exist on hope that the world will not change too much each year. If the world does not change too much, then the companies will make money. In order to pay a dividend, companies have to generate extra cash, some of you may have seen the TV show the Shark Tank and one of the guest Kevin O’Leary talks about “show me the money or cash flow”. If you think similar to Kevin, you will tend to stick to companies that pay dividends. Dividends that come every year and perhaps, just perhaps, you can be lying in the hammock.

The first aspect of passive profitable investing is start with dividend paying companies.

There are always more questions than answers, till the next time – to raising questions.

It is said, in life there is death and taxes. Hopefully for the readers there is something more – living life, family and earnings.

Taxes is a consideration for every investment, however it should not be the first consideration. If you worry too much about taxes, there are relatively easy methods to shelter your money, but please note some of your taxes pay for the lifestyle which you live, or paying something is good. The question is how much?

That being said, paying too much or paying when there are alternatives, needs to be seriously considered. For example if you bought a Guaranteed Investment Certificate from your bank the interest would be 100% taxable as interest income. If you bought the stock or shares of the bank as it pays dividends – the dividend rate is taxable at 60%. You have saved 40% through the use of the tax system. (In the area where the writer lives these are the rates, over areas can vary) In addition, with dividend stocks, the capital gain is taxed at 50% and less if you lose money for the losses are deducted agianst the capital gains and the losses can be up to 5 years ago. This is the tax system helping owners of shares and dividend paying companies, why not use it?

From a tax perspective, dividends have advantages over interest income, but the it should not be the first consideration for investing. Over the years many of us have put money into investment devices to save taxes, but the investments have turned out to a long term holding on the books as the investments were duds. Words of advice – take taxes into consideration, but if you would not buy the investment without the tax savings, is it worth doing? With Dividend stocks and the quality that is available, the writer is confident you will see the tax system as one more advantage for the Dividend paying shares.

There are always more questions than answers, till the next time – to raising questions.

If you were to look through the companies listed on the Stock Exchange, you will see many companies. Most do not pay dividends, they are listed on the exchange for growth reasons – the expectation their stock rises because of something they do, lands they own, all sorts of reasons. If you own them, you may get richer faster.
The ones that pay dividends are the ones, I am interested in. Their stock prices do go up and down, but generally not to the degree the stocks that do not pay a dividend. The reason why dividend stockds tend not to go down as much is they pay a dividend or a yield to you. If you own them you will get richer slower.

The companies that pay dividends tend to be market leaders, are in industries where they are either regulated more or in the wonderful world of capitalism (those with less competition), for good reasons. If we take an example of a pipeline company that transports oil. There are a few of them – they pay dividends. As the public sentiment moves towards the environment, the public does not want to see more of these companies for they provide a highly regulated important service. Highly regulated service includes a barrier to entry for others, which means the pipeline companies earn enough money (plus some) to continue to pay dividends into the future.

The point of the above is when you examine dividend stocks, you will see some of the best companies on the exchange and that is a great starting point.

There are always more questions than answers, till the next time – to raising questions.

Whenever you invest your money, one of the highest priority or most important things to know is when do you exit? When do you sell some or all of your position?

If you are similar to the the vast majority, who invest to make gains, your answer to the question was something like when I make money. But when do you sell part or all of your position? The answer will be the difference between making money and not making money in the world of investing.

If you have no strategy, then you need to have built in feature(s) to ensure a strategy automatically kicks in. With dividend stocks and monthly income funds – the strategy is simple, if a company does not pay or cuts their payments, you automatically know without even thinking, about the long term perspectives of the company, it is time to sell and move on. There will be plenty of signs before the announcement of a dividend cut for it is not good company thinking to raise the dividend and then cut it the next year. But at the minimum, you know what to do and you have a exit strategy and that action will save you money.

There are a great many stories about stocks that rose to great heights in prices, then came down to much lower prices, people owned them on the way up and down, because they had no exit strategy or when to sell. It is easy to get attached to a company story, you need an exit strategy or when do you sell part or all of your holdings? Just remember taking some profits is good.

There are always more questions than answers, till the next time – to raising questions.

it seems in this world we live in, you have to be connected and react all the time. Sometimes that is a great thing and we can see all the advantages. Sometimes that drains you, because the rest of your life seems to have to connected and interconnected and all you do is react. What if you could pick investments and visit them weekly, monthly or quarterly, but in different ways have an eye on them all the time?

If you owned dividend stocks for example those in the consumer goods sector- ie Wal-mart, Johnson and Johnson, or P&G – all companies paying a dividend for many years. Everytime you went to the grocery store or shopping you can check out your investments. As you go into the store you ask your yourself or those who you are with you about the store and the displays – are they kept up?, what turnover of goods are they doing? do you like the selection? the products? If the answer is yes – the companies are still appealing to you and others similar to you, your research could be over. If the answer is maybe or no, then there are other questions and other things to consider. (the same story can be said about the oil companies, your utility company, etc) If you are changing then perhaps others are changing to and how is the company still making money from you?
This is why, no matter what industry or sector you work in, you can see opportunities and challenges – it is the questions that determines if you do something.

Dividend stocks allow you the ability to take your time. Before a company can pay a dividend, the company needs to have the ability to pay its debts, have money in the bank to carry out its programs and then pay the dividend. Often before the company stops paying a dividend, the signs of trouble can be seen. The above helps you look for them at a seemingly more leisurely pace.

There are always more questions than answers, till the next time – to raising questions.

When you look at a stock exchange chart index over the years, there is a significant upwards trend. Indicating if you owned the index over the years covered, there would be some bumps along the line, but if you owned stocks over the time period you would have made more money than leaving your money in a GIC or a bank account.

One of the questions to ask is why? The first clue is to look at the stocks which make up the index 50 years ago, 25 years ago, or even 10 years ago. Are they the same? The companies your grandfather grew up with are not the same as you grew up with, fortunately some are, but not all. The names in the stock exchange change – for lots of reasons.

In order to keep things simple, how do you ensure that when changes occur, as they will, you continue to benefit? If you own an index fund, when the stock exchange changes the indexes, the losers are removed. The winners are kept and more winners are placed in the index till the next time. If you own a dividend fund, if a company does not pay a dividend or is threatening not to pay, the manager sells it. They companies get replaced by those that do pay dividends.

Thus a key to successful investing is limiting losses. Losses happen, you can not avoid them. Sometimes losses are good for the tax code allows you to deduct your losses against any capital gains so losses may not be such a bad thing, if you had capital gains. Dividend shares provide an automatic discipline to exit a holding, even one that you have an emotional attachment to.

There are always more questions than answers, till the next time – to raising questions.

This is a website about the virtues of investing in a relative boring fashion, being comfortable, and making you wealthier.

Why dividend paying stocks?

It works.
Checking your portfolio does not have to be done daily or hourly.
One of the important reasons – there is a guaranteed method – when you sell to limit losses.
In investing in these companies – you are buying some of the best that is to be offered
It is good for taxes – dividends are taxed better than interest income
It is relatively easy to keep track
Your habits reflect the companies in your portfolio
You sleep better at night

What should you do?

Depending on the money you start out with – buy either a Dividend Fund, idivdend fund or buy the individual stocks and if possible use the reinvestment option.
In the long run you will be better off. In addition add a monthly income fund.

There are always more questions than answers, till the next time – to raising questions.