Dividends should be a central focus for any sound investing plan. Luckily for us, the recent explosion in internet blogging has created a vast number of reputable and educational dividend blogs to follow.
I’ve written in the past about why you should invest in stocks with dividends. Simply put, the income from an investment is an instant boost to your portfolio.
Income, or interest, from an investment or loan creates an reward for money upfront. The lender gives up capital now with the risk of not getting it back in order to earn more money through interest.
This interest can either compound for you or against you. It’s the same reason why your credit card won’t be paid off for decades with minimum payments, and why even a small amount invested over the long term can create massive amounts of wealth.
Stocks that don’t pay dividends give no incentive for the investor’s risk other than the potential of going up in price. How is that any different than gambling? At least in gambling it’s clear that you can lose money.
Since the best dividend stocks tend to increase their dividend payments each year, the income received increases exponentially. Smart investors additionally reinvest their dividends which also increases the income received exponentially.
So now you have two forces of compounding interest working for you in a single investment. That’s the power of dividends, and that’s why you should learn how to invest with dividends.
Of course I blog extensively about dividends, value investing and tips for beginners. But there are other dividend blogs that I both have read and recommend you follow.
This is an excellent dividend blog written by Tim McAleenan Jr. which teaches about combining the power of dividend growth and long term holding periods with the attractive prices and valuations of prudent value investing. Sounds a lot like me.
Tim’s Income Investing Archives are filled with articles covering many top stocks such as Walmart, Coca Cola, IBM, Bank of America, and more. What I especially like is that he takes the time to talk about the strategy and mindset behind why certain stocks are good investments at the current price.
Like I did when co-founding The Money Tree Investing Podcast, Tim uses the metaphor of investing in dividends as planting a dividend tree. The great thing is that you could stop adding to your investments during a tough financial period and your “tree” would naturally continue to grow. I couldn’t agree more.
The focus behind the blog is finding income period, whether that’s in treasuries, bonds, or dividend paying stocks. It just so happens that today’s best income opportunities are in stocks, which is why Tim writes about them.
This emphasis on income is exactly why you should follow this blog. Turns out, I’m not the only one who has figured out the importance of income and compound interest with your investing.
Ben Reynolds is the founder behind the popular dividend blog, Sure Dividend. Ben frequently writes about and updates lists on “Dividend Aristocrats”, which are S&P 500 stocks with a track record of raising their dividend for 25 consecutive years or more.
The investing philosophy behind this website is to use Ben’s “8 Rules of Dividend Investing”, which combine particular valuations and dividend health metrics with common prudent investing advice such as diversification. [click to continue…]