On my stock YouTube channel which you can check that out here: https://www.youtube.com/channel/UCKIXApIrXdvyajZvKV4VSHg on this channel I show you how I invest in the stock market and how I love to invest into dividend paying stocks for passive income. Before I begin talking, I just want to say that in this post I am not giving anyone financial advice or advice on how to spend their money or how to invest. This is what I do and you should always do your own research before investing any money. Now I have said on my blog post and videos that I reinvest all the dividends that I get into more dividend paying stocks.
By doing this, you can make more money and hit your goals much faster and then you will hit that compound growth and you money will be making money. The problem is that when you are starting out in the stock market and you buy a few shares here and there and the divined payment is not much at all in fact you are getting a few cents so how can I reinvest into more stocks when I am not making enough money to buy one share of anything? That is a very good question that needs to be answered.
How do dividends get reinvested when the dividend amount is not enough to buy more shares of the stock?
So when you are first starting out in buying dividend paying stocks, you are not making no money. When I first started out, I was making .30 cents here .50 cents here every month and every other month which is not a lot of money. People and myself include tells people to reinvest those dividend back into the same stock or a different an here what we are talking about. When getting small dividend payments, just take that .20 cent of .30 cent and use that with your money and buy stock. Now .20 cents is nothing but that .20 goes into a stock which will save you some money. You can do fractional shares which you can take whatever the dividend is and put back into the stock which is good to do or reinvest into a another stock. To be honest, when starting out is the hard par cause you are not making any money and you need to keep investing.
Investing into dividend paying stocks will take time. Over time if you keep investing your money into dividend paying stocks, overtime you will more and more dividends and now you are making some money to invest. Right now at the time of me writing this blog post, I am making about $100 per month in dividend and I get half the dividends in the middle of the month and the rest at the end of the month so in the middles once I got the dividends which is about $50 dollars or so, I take that money and buy shares of a stock that I want more of, or a stock that the price is cheap for that day or buy the same stock.
Yes it takes time to build dividends to a point where it can buy stocks but everyone starts a zero and this will take time. I still get .21 cents dividends and I add use those to buy more stocks. So when happens once you get those dividends they sit in your account and once you add money, that money will combine with those dividends all together. I use robinhood and webull and if you want to check them out you can click here for both: Webull: Robinhood:
Investing into dividend paying stocks take work and I invest about $ 400 per month and I did that for one year and reinvest all the dividends into dividend paying stocks and after one year I am making $100 per month and now it’s getting faster with the higher amount of dividends that I am getting. So invest slow and take your time and do your own research before buying any stock on the stock market.
Some platforms like robinhood has a reinvestment program or called DRIP which when a company pays you do dividend, robinhood will reinvest for you and that dividend will be placed back into that stock in a fractional shares. When you have enough fractional shares Then that stock will become a full share. I don’t use the DRIP program because I want more control of my stocks and where my money goes but there is nothing wrong with the program and I just want the full share of the company not a fractional share. I would buy a fractional share of a company like Telsa since it cost so much to have one share but Tesla does not pay a dividend.
Dividends is great for passive income:
Yes dividends can be a great way to invest your money and have an passive income stream coming in without you having you to work for the money. Yes if you are just starting out in dividend investing, it will take time to build enough dividend to buy a share but whatever you get in dividends, reinvest into the same stock or a different stock. Overtime the compound effect will take place and it’s like a snowball and overtime the dividends will keep rolling in and this will make it easier to reinvest.
