top of page
Stocks

How To Make Money Off Dividends

​

Everyone who enters the stock market wants to make money from their investments. And to do that, first, they need to understand how people really make money from stocks. Basically, there are two ways to make money from the stock market  Capital appreciation and making money from dividends. 

​

When it comes to capital appreciation, most people know this method to make money from stocks. Buy low and sell high. Purchase a good stock at a low valuation and wait until the price goes up. The difference in the purchase and selling price is the profit (capital appreciation).

​

Making money through dividend investing requires finding companies that have a good chance of increasing their dividend payments year after year, thereby causing more money to flow into your bank account. As the sales and profits of a company grow, so does dividend income.

​

​

 

Important terms to know regarding dividends.

​

Before we dig deeper, first, you need to learn few crucial terms regarding dividends-

 

Dividends: 

Dividends are the profits that a company shares with its shareholders as decided by the board of directors.

 

Dividend yield: 

Dividend yield is the ratio of annual dividend per share divided by the price per share. The formula for dividend yield is

given below:

Dividend yield = (Dividend per share/ price per share)

​

Dividends by a few popular companies

​

Here are the annual dividends of a few famous companies in U.S (2023).

  • Pioneer Natural Resources (PXD) - Dividend yield: 13.5 percent - Annual dividend: $27.24

  • Devon Energy (DVN) -Dividend yield: 6.7 percent -Annual dividend: $3.56

  • Dow Inc. (DOW) - Dividend yield: 5.1 percent - Annual dividend: $2.80

  • International Business Machines (IBM) - Dividend yield:  5.2 percent - Annual dividend: $6.60

  • Verizon Communications (VZ) - Dividend yield: 7.1 percent - Annual dividend: $2.61 per share

  • AT&T (T) - Dividend yield: 6.1 percent - Annual dividend: $1.11 per share

  • Prudential Financial (PRU) - Dividend yield: 5.5 percent -Annual dividend: $5.00 per share

  • Philip Morris International (PM) - Dividend yield: 5.1 percent - Annual dividend: $5.08 per share

  • Walgreens Boots Alliance (WBA) - Dividend yield: 5.8 percent - Annual dividend: $1.92

  • 3M Company (MMM) -Dividend yield: 5.7 percent - Annual dividend: $6.00

 

It's important to note that dividend payments can change over time and vary based on company performance, so these amounts may not be accurate or up-to-date.

 

Bottom Line

Dividend-paying stocks or mutual funds can be a great way to earn extra income. Remember, if you own these securities in a taxable brokerage account, you'll owe taxes on the income, even if you reinvest the dividends. To avoid taxes, you'll need to own them in a tax-advantaged account like an IRA, 401(k) OR TSFA.

Dividends increase over time.

This means that a good, fundamentally strong company will increase its dividends with time.

​

​

Remember, 

while dividends can be a good source of income, they are not guaranteed. Companies may reduce or eliminate their dividends if they face financial difficulties. Therefore, it's important to do your research and diversify your investments to reduce risk.

​

​

HOW TO MAKE MONEY FROM DIVIDENDS?

Image by Blogging Guide
Image by Morgan Housel

Dividends are a portion of a company's profits that are paid out to its shareholders. If you own shares of a company that pays dividends, you can make money from those dividends in a few different ways. Here are some tips on how to make money from dividends:

01

Invest in dividend-paying stocks

The first step to making money from dividends is to invest in companies that pay dividends. Look for companies with a strong history of paying dividends, and ones that have a track record of increasing their dividends over time. You can research dividend-paying stocks on financial news websites, stock market blogs, or consult with a financial advisor.

03

Invest in dividend-focused ETFs

Another option is to invest in exchange-traded funds (ETFs) that focus on dividend-paying stocks. These funds typically hold a diversified portfolio of dividend-paying stocks, which can help to reduce your risk.

05

Monitor your investments

Keep an eye on the companies you've invested in and their dividend policies. If a company stops paying dividends, or if its dividend growth slows down, it may be time to consider selling your shares and looking for other opportunities.

02

Reinvest your dividends

Many companies offer a dividend reinvestment program (DRIP) that allows you to automatically reinvest your dividends in additional shares of the company's stock. This can help you increase the size of your investment and potentially earn more dividends over time.

04

Consider high-yield dividend stocks

High-yield dividend stocks are those that pay a higher dividend yield than the average for the stock market. These stocks can offer higher income potential, but they also come with a higher level of risk.

Promotion

Invite your friends to Wealthsimple and get $10,000 managed free 12 months for each friend that funds their account.

POWERFUL DIVIDENDS
10:45

POWERFUL DIVIDENDS

EDUCATIONAL LINKS Trappers Anonymous Group: https://join.trappersanonymous.com/ Wallstreet Trappin Course: https://www.thetrapperuniversity.com/p/home Get 4 eBooks valued at $79.96 in the Kilo Pack for $59.99: https://www.thetrapperuniversity.com Sign up to stay in the know at https://wallstreettrapper.com đŸ“± SOCIAL MEDIA Facebook Page: https://www.facebook.com/WallstreetTrapper/ YouTube: https://www.youtube.com/channel/UCR6hXiWOlFWc46qMFMClKHA Instagram: https://www.instagram.com/wall_street_trapper/?hl=en “From the Trap to Wallstreet” From the Trap to Wallstreet is not only a brand but a movement dedicated to empowering and improving the financial state of Urban America. The foundation of this movement is to highlight the power of the black dollar by transitioning its use to make other races and nationalities wealthy to making it our most powerful tool in building wealth for ourselves and generations to follow. This movement specifically caters to us! Those that are driven to improve their financial state through investing in company stocks & bonds. For far too long the knowledge of wealth and how to attain wealth has been crafted in an encrypted language for us to be unable to comprehend easily. Those days are gone! From the Trap to Wallstreet pioneers this journey for all. The beginning of the phrase “From the Trap” is a mixture of two aspects. Number 1: The Trap being a state or condition of a people being financially trapped, unable to find the path to financial freedom no matter how many jobs or side hustles they work. Number 2: The term “Trap” describes a place that encourages our men and women to engage in illegal activities inevitably funneling them into a justice system. That very system then strips them of everything financially, emotionally, and mentally leading them to a trapped mindset. The ending of the phrase “To Wallstreet” simply is the destination place or state where wealth is the norm. When you are from the “Trap” culture you view Wallstreet as a place where a bunch of rich and wealthy folks get richer and live better lives. Coming “From the Trap“ then ending up on “Wallstreet“ would be the epitome of the “Trap” evolution to new surroundings, a new mindset & a new lifestyle.
Best High-Income ETFs In Canada? | HDIV & HYLD FULL Overview - Hamilton ETFs Review
23:44

Best High-Income ETFs In Canada? | HDIV & HYLD FULL Overview - Hamilton ETFs Review

📈📚 Join The Investing Academy ➀ https://bit.ly/theinvestingacademy Today we'll cover two of the fastest-growing high-income ETFs solutions in Canada - HDIV.TO & HYLD.TO from Hamilton ETFs. Thank you to Hamilton for sponsoring this video! Join Hamilton ETFs & Stay Informed: https://bit.ly/3Wvr22J Learn more about HDIV: https://bit.ly/3XEKfzX | HYLD: http://bit.ly/3IR32Uk HDIV Outperforms S&P / TSX 60: https://bit.ly/3ISvXY0 Visit Hamilton ETFs Website: http://bit.ly/3khuEb0 ----------- Follow Me On My Socials: Blossom Social ➀ (See My Exact Portfolio & Trades) - https://getblossom.page.link/brandon Instagram ➀ https://bit.ly/3Oechgh TikTok ➀ https://bit.ly/3PlNvfw LinkedIn ➀https://bit.ly/3RLndF7 Website ➀ https://www.theinvestingacademy.ca/ ----------- 🏩🇹🇩 Sign Up Bonuses 💰💾: â–ș Questrade Online Brokerage (Get $50 in commission-free trades) - https://bit.ly/3OhrRrK â–ș Wealthsimple Trade ($50 cash bonus when you deposit $150 or more) - https://bit.ly/3v1FBQt â–ș Wealthsimple Invest Robo-Advisor (Receive a $50 sign up bonus) - https://bit.ly/3Pm2g1Z â–ș NEO Financial (Cash Back Credit Card) - https://bit.ly/3yJqb4s The above affiliate links are provided for your convenience, and if you click on a link and end up purchasing a product or service, this channel may receive compensation for the referral. We have personally vetted each of these companies and services and, in our opinion, we believe they provide value to our viewers, depending upon your individual circumstances. Business Inquiries: darwin@theinvestingacademy.ca ----------- Hamilton ETFs Disclaimer: A prospectus containing important information relating to these securities has been filed with the securities commissions or similar authorities in certain jurisdictions of Canada. Copies of the prospectus may be obtained from info@hamiltonetfs.com, www.hamiltonetfs.com or on the SEDAR website (www.sedar.com). Commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the ETF Facts or prospectus of the Hamilton ETFs before investing. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated. For a summary of the risks of an investment in the Hamilton ETFs, please see the specific risks set out in the Hamilton ETF's prospectus. Hamilton ETFs trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination. https://hamiltonetfs.com/legal/ ----------- Disclaimer: The views and opinions shared on this channel are for informational and educational purposes only. Although previously licensed, the contributors are no longer industry participants and are not licensed to provide financial advice. They strive to provide you with educational information in an entertaining manner. Always do your own research and due diligence before investing. Generally speaking, you should consult a licensed investment professional before investing.
MITCH'S FITGEARbanner

Advertisement for www.mitchsfitgear.com

bottom of page