Why you need a Dividend Portfolio?

The only reason you are reading this is because you want to earn extra income without spending time doing work. And I’m guilty of that as well.

This is why I started a dividend portfolio that helps to give me some passive income. Suppose I lose my day job due to market volatility, retrenchment or for whatever reason. In that case, my dividends will provide some small money for me to continue sustaining my life, on top of my YouTube income as an additional income.

But here, we will cover __ the reason you need a dividend portfolio.

1) Passive Income Stream!

The most obvious reason is the passive income stream. This means not needing to work, but still getting some income. Dividends are a form of profit that is paid out to shareholders for holding a company’s stock during the ‘qualifying’ period.

Most companies pay a dividend either on a quarterly or bi-annual basis. This means you get paid every 3 months or every 6 months and this varies depending on the company. There are some ETFs like $Invesco S&P 500 High Dividend Low Volatility ETF(SPHD)$ that pay a dividend monthly.

Regardless of when this dividend is paid, you will get some money throughout the year if you plan your dividend strategy out wisely.

2) Dual advantage of Income and Potential of Growth

When you purchase a dividend stock or ETFs, more likely than not when the market moves upwards, you get to enjoy the dividend payment and also a potential appreciation in the stock price. This means, when the stock increases in price, you have the option to decide whether you want to sell the stock or ETF for the capital gains or continue holding it to receive those dividend payments.

But this also depends on the stock or ETF that you purchase.

3) Peace Of Mind

This is my favourite reason to buy dividend stocks. The worst thing you want when you’re investing is to constantly check your brokerage account to see if your portfolio is up or down. Are you losing money or are you getting gains?

With Dividends, you get notifications when dividends are paid out and this allows you to then decide if you want to reinvest those dividends to get more stocks or just leave the cash in there for something like a TigerVault where you can get additional gains on the dividends that you have already collected.

Dividend investing can be great for someone who is looking to receive a steady stream of income regularly, and for those who are looking to reinvest and compound that money, it can be beneficial in the long run.

But like any investment strategy, there are pros and cons in dividend investing and one should always do some reading to see if the pros outweigh the cons or if dividend investing is in your favour.