TSME 004: All About Dividends

Tyrone Jackson often says that wealth is a series of wealthy habits. One of those habits should be collecting dividends. In this episode, Tyrone tells you why.  When searching for wealth building tools, most people find Mutual Funds, in which financial advisors will pick and trade stocks for you in large sums with other people’s money. Tyrone teaches people to personally pick stocks for themselves because you can make a lot more money this way.   Tyrone’s approach to the stock market is to buy and trade very low risk stocks. He almost exclusively deals with stocks that are members of the DOW Jones Industrial average and the S&P 500. He finds that his students make thousands of dollars by being a little more conservative with what stocks that choose, and collecting dividends.  What is a dividend? A dividend is your share of a company’s profits after they have paid all their expenses on a quarterly basis. In other words, buy owning a company’s stock, you own a small piece of their business, and thus you receive a small piece of their profit.  Tyrone explains how this works through three case studies.  1) Microsoft (MSFT) Microsoft’s dividend is $1.24 per share annually. However the shareholders receive that as $0.31 every quarter. If you owned 100 shares, you would receive a check for $31 every quarter. If you owned 1,000 shares you would receive $310, if you owned 10,000 shares you would receive $3,100, and so on.  2) Coca Cola (KO) Coca Cola’s dividend is $0.30 every quarter. If you owned 100 shares, you would receive a check for $30 every quarter. If you owned 1,000 shares you would receive $300, if you owned 10,000 shares you would receive $3,000, and so on.  3) AT&T (T)  AT&T’s dividend is $0.47 every quarter. If you owned 100 shares, you would receive a check for $47 every quarter. If you owned 1,000 shares you would receive $470, if you owned 10,000 shares you would receive $4,700, and so on. That’s $18,800 per year for doing nothing but owning shares of a stock!  When you choose stocks directly, dividends should be a part of your investing plan because stocks are assets. Your children can be beneficiaries to your wealth accounts and literally inherit your stocks that will pay them dividends. They can inherit your residual income. Tyrone believes that wealth is a feeling first. When you receive checks in the mail on a quarterly basis, it feels good! That feeling is something you can build on.  Start feeling good now. Learn more about how at WItradeschool.com.