Comments

MoneyCone says

I love simple posts such as this one! I too prefer companies that payout dividends. Some companies dont pay out dividends since they believe they can better manage the money than giving it back to shareholders.

Id like to be the judge of that!

Dividend Mantra says

MoneyCone,

Id also like to be the judge of that.

Nothing better than collecting a check and reinvesting itwaiting to receive an even bigger check next time.

Dividend Monk says

Good tutorial. Im consistently surprised at people I encounter that lack knowledge on finance. Even engineers I meet often arent particularly knowledgeable about areas of finance including dividends.

The very first article on my blog was also called What is a Dividend, since I wanted to put down a foundation for it right away on my site.

Dividend Mantra says

Dividend Monk,

Thanks for stopping by. I was surprised as well. As I look back on the article and re-read what I published, it sounds a little rude and sarcasticbut I truly didnt mean it that way. I was genuinely just surprised about peoples lack of knowledge on (what I thought) are basic financial terms.

I never even thought about trying to define a dividend as an article, but that conversation provoked me to. I probably should have done like you and set out right away to put my own definition on it.

Thanks for stopping by. Hope youre having a great weekend.

Mia says

Hello Jason!

This is Mia, i asked you the question about Vanguards Admiral Shares previously. Thank you for your response. I feel like a sponge reading and reading your blog posts, trying to educate myself.

As Ive said previously, I am 25 years old, and would like to adopt your strategy in dividend investing. Could you kindly give me a dividend investment for dummies which is literally a step by step process of how to purchase shares? For someone who is new to investment, I dont even know how to start!

I assume that step1 is to open a brokerage account, what is the step 2?

Also, should I be purchasing these shares in the IRA account or in the simple brokerage account? My strategy is to buy and hold these until my retirement.

Thank you!

Dividend Mantra says

Mia,

You may benefit from reading some of the books Ive recommended in the past. They do a great job of explaining the basics:

I also wrote an article last May that discusses what Id do if I were starting all over again (ignore the ARCP recommendation, however):

Youre right in that the first step is to open a brokerage account (this is true no matter how you decide to invest). So you can pick your favorite discount brokerage firm and its very easy to open an account I use Scottrade and have a few affiliate ads here on the site. When opening your account, youll have to figure out whether its going to be a taxable account or an IRA. Depending on how much you can save and invest, you may want to open both. I use a taxable account only, but thats only because my timeline is so aggressive. I recommend maxing out tax-advantaged accounts for most everyone else.

From there, its analyzing and purchasing individual stocks. For help on that, you may want to read this article:

I hope this gets you started down the right path. Start slow and read a lot. I wouldnt act until you feel 100% comfortable. At 25, you still have plenty of time on your side.