Ann’s Simple Income Investing Strategy

A friend of mine is starting to look into dividend investing, and has lots of questions about the subject. My attempt with articles about Ann, a simple investor, is to keep things as simple as possible.

Summary

  • Ann, our simple investor, looks forward to income, money received on a regular basis, because it can be used to pay down debt, pay bills, or to be reinvested.
  • A simple way to earn income is to buy shares in dividend-paying leaders.
  • Ann decides that her $11,000 investment should earn her a minimum income of $330 annually.
  • Ann ends up buying shares in 11 leaders in 11 sectors, earning an income of over $400, exceeding her goal.

Why Would You Want Income?

Money can be used for many things, including paying down debt, buying for groceries, paying for your children’s tuition, watching a movie, paying the utilities bill, paying for gas for your car… you name it!

Income is money received on a regular basis. Among the most magnificent thing income can do is that it can earn you more income. That is, by buying income-generating assets, you can use those generated income to buy more assets that would generate more income.

A Simple Way to Earn Income

Some people buy real estates to get rental income. Please allow me to introduce Ann, who likes things simple. Ann feels it’s a hassle to earn rent because she’d have to deal with tenants. Additionally, Ann doesn’t have much to invest, and getting a mortgage is another hassle.

Well-established companies pay dividends to shareholders for holding their shares. How cool is it to become a part-owner to a business such as Chevron (NYSE:CVX), Microsoft (NASDAQ:MSFT), and Pepsi (NYSE:PEP)? Every 3 months, you’ll get a dividend paycheck from them.

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Disclosure: At time of writing, I’m long BBL, CVX, KMI, MSFT, PEP, XOM.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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