Double Your Dividend Payouts
Double Your Dividend Payouts
Today we have a special guest joining us.
It’s with great pleasure that I introduce you to financial expert and analyst Mike Burnick.
Mike has brought his trading strategies to the masses for over 30 years. And he has seen it all.
As the director of research and client communications at Weiss Capital Management, Mike worked hard to manage the everyday asset allocation and trading responsibilities for a $5 million ETF strategy.
He was a Registered Investment Adviser and portfolio manager.
And he’s even helped people just like you build wealth for their golden years.
Not to mention he frequents channels like Fox Business News, Bloomberg TV and CNBC.
Currently, he’s at Seven Figure Publishing sharing financial research with anyone who’s ready to learn and make big gains.
And now he’s here to give you a piece of the financial literacy pie.
Without further ado, here’s Mike.
Double Your Dividend Payouts With One Simple Step
Hi, Mike here.
I want to show how you can set yourself up to get even more out of your dividend payouts and strengthen your portfolio to new heights.
When dividend payouts are accrued, they will often sit in your bank with little to no interest.
And furthermore, even if you do reinvest these earnings, you will take on broker fees for every transaction made…
Fees that can quickly add up over time.
However, with one simple visit or call to your broker, you can set yourself up to not only automatically reinvest these dividend payouts, but also bypass these pesky fees at the same time.
I’m talking about dividend reinvestment plans, often referred to as DRIPs.
A DRIP will automatically reinvest a dividend payout back into the stock itself — allowing you to automatically benefit from a company’s growth without having to pay broker fees.
This compounding nature allows you to buy more and more stock, padding your retirement all along the way.
But remember, to qualify for DRIPs you must both a) own the stock and b) the stock must have dividend payouts.
Let’s take a look at a great example of how DRIPs could exponentially increase your profits, using a stable stock with good dividends.
Let’s say you invested $5,000 in Coca-Cola (NYSE: KO) shares 11 years ago.
Your investment today would be worth a total value of about $8,600!
That’s a decent $3,600 gain. And roughly two-thirds of that profit came from dividends alone.
However, if you were using DRIPs to reinvest these shares back into the stock, you’d have an even larger payout thanks to compounding your gains.
Using KO as an example again, your original $5,000 stake would grow to about $11,000 today.
A $6,000 profit!
That’s two-thirds more money in your retirement account for barely lifting a finger!
No doubt, many investors turned up their nose at Coke’s 2.8% dividend yield back in 2008 as not rich enough.
But if you staked your claim in KO 11 years ago, you would be cashing dividend checks of $350 this year alone, thanks to acquiring about 45 additional shares over the years from reinvesting your dividends.
And that’s a rich yield of 7% based on your original $5,000 investment!
Too good to be true, right?
Well, there are a few things to keep in mind before you start implementing DRIPs:
The first being some brokers have fees for DRIPs.
Someone has to do the reinvesting of those dividend payouts, and brokers will often implement a small fee that will cut into your profits.
Give your broker a call or visit their website to see exactly how much they are taking out of your profits.
Then you can weigh whether or not it’s better for you to just reinvest these payouts manually.
Next, understand that when you implement DRIPs, you’re in for the long haul.
Just like many other strategies, DRIPs are meant to help pad your retirement for the long run.
And while they aren’t a quick fix that will net you immediate double-digit gains, they are there to provide you a steady, stable income on top of your already dividend-paying stocks.
Finally, it’s in your best interest to keep track of all your statements if you plan on implementing DRIPs.
Just like dividends, DRIPs are taxed at the end of the year when you have to report any gains or losses from your stocks.
Often times, your broker will provide monthly statements and host a printable version online, which will make the process much easier.
Calculating short-term versus long-term stock gains can get complicated, so it’s best you keep a good track of your gains throughout the year.
With all this in mind, you may be asking, “How do I get started?”
Your broker’s website will often be able to immediately get you started on implementing DRIPs on any of your dividend-paying stocks.
If you’re having trouble, a quick call to your broker can help you get started — albeit sometimes for a fee for their work.
It’s oftentimes best to forgo the fee and do it directly through their platform or website.
Here’s to growing your wealth,