• Dividend reinvestment over time is the sure-fire way to set yourself up for an easy financial future. Dividend Emperor will help you get rich SLOWLY. Come with us and develop an empire of dividend paying stocks which will provide an eternal passive income stream.

    Friday, March 3, 2017

    Passive Income Pitfall

    Don't be railroaded.

    The whole point of high yield dividend investing is to maximize your returns and income over time through reinvestment and compounding of dividends.  So naturally, one would think that the higher the dividend yield, the better the position, right?  Beware of a very high dividend yield. If it looks too good to be true, then there is a good chance that it is.  Very high yields are often unsustainable.  If a stock that yields 6% cuts the dividend or goes under after 5 years, then what is the point?  The point here is to build passive income and wealth by buying and holding for 10, 15, or 20 or more years! 

    Don't be sucked in by companies with high yields with an unsustainable business model, bad balance sheet or too short a history of dividend payouts.  Take a look at the dividend aristocrats which have paid out those solid yields over many years.  Also search for companies which have a history of increasing the payouts. 

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