Sorry if this is kind of a dumb question... But I've been reading a few things here and there, and I'm wondering how much of a cashflow you could build by buying stocks who pay dividends... Since most of them pay quarterly, it can't be that much, right? I respect everyone's privacy, but if you could just make a general idea of what is possible, I'd sure appreciate it Thanks in advance!
This will vary from company to company and even industry to industry somewhat. Utilities are pretty well known for paying good dividends while having pretty stable earnings. Over here, it's also very common for pipeline companies to pay very good dividends. And pretty much any good limited partnership is likely to pay a nice dividend. Of course you've got to be a little more careful with some of the riskier companies in riskier industries that may offer a good dividend for a while, then cut it or do away with it when earnings / credit get tight. Transocean comes to mind. KMI has a dividend yield over 4%: http://www.marketwatch.com/investing/Stock/KMI?countrycode=US BPL over 6%: http://www.marketwatch.com/investing/Stock/BPL?countrycode=US I own a fair amount of BPL and a little KMI. Entergy over 4%: http://www.marketwatch.com/investing/Stock/ETR?countrycode=US Duke Energy ~ 4%: http://www.marketwatch.com/investing/Stock/DUK?countrycode=US IEP over 6% - I own lots of this stock: http://www.marketwatch.com/investing/Stock/IEP?countrycode=US Hopefully you can invest in some sort of tax-advantaged account and reinvest the dividends while you're younger in order to build up your wealth.
In terms of percentage, I belive the average for the SP500 is something like 2%. There are of course much higher dividend payers out there, currently the average for companies that I own hovers somewhere between 4% and 5%. The rest is all up to the invested capital. If you have a couple million to invest then you should be able to live nicely just on dividends if you play your cards right.
Is the percentage on the price you bought at, or the price on any given time? I'll do my own math, and try to estimate how gangster you can get with dividends What's your thoughts on mutal funds? They also pay dividends, right? What's their performance like vs. regular stocks? Thanks a lot guys!
Price at a given time. If you look at the company details on most financial websites it will tell you the amount of dividend paid (in the same currency as the stock is listed) as well as the dividend %. With a lot of stocks as long as the company is good the dividends will generally increase overtime so the yield for your buy price will generally increase over time. As for mutual funds, you do have both the kind that pay out the dividend as well as those that keep it in the fund.
A good investment portfolio, even with relatively low risk, still would make around 7% profit each year. That's been the rule of thumb anyway
If you are lucky then your return on investment would be more than what you invest. Dividends can be plentiful when you play your cards right. If you invest your money in it correctly you will get good results.
Better managed mutual funds can be a very good way to invest at least some of your money. Probably most or all of the money of someone who doesn't have the time or temperament to do their own investing. Some funds do seek to find dividend yield.
