Dividend Carpet Bombing - Earning passive income froms stocks every month

in #money5 years ago

Do you want to be paid by companies every month? In this post I will show you how to do it!

If you are new to my following I highly suggest reading my first post. I tried to explain what the dividend growth investing strategy is. I highly recommend to read this one first, you can find it here: https://steemit.com/money/@nordal/start-earning-passive-income-from-stocks-dgi

I will shortly explain what the rational between a dividend growth investing strategy is. The strategy is to own companies with a strong record of paying dividends to shareholders. This means that if you are a shareholder you get paid dividends (usually) 4 times a year. This gives you a consistent revenue stream. These mature companies not only pay dividends every year, they also pay increasing dividend every year. That means that as long as the company have enough revenues for this, your wealth will increase and compund over time.

I have written a couple posts about what kinds of companies these are, you can find these analysis here:

Now over to the dividend carpet bombing strategy:

Let's imagine that you are investing with this strategy to complement your already existing income. When do you receive your regular salary? Most people receive the salary on a monthly basis. Imagine that you received your salary every 4 months instead, would be hard to plan right?
Dividend carpet bombing is a way to solve this problem in your dividend portfolio. To keep motivated to continue to compound your dividend over time, you want to see a return on your profits. This strategy can therefore also help you stay motivated (illustrated by seeing your money grow).

The Strategy

Most companies pay dividend every 4 months, this means that if you own companies that pay out dividends at the same time, you will only receive dividends in March, June, September, and December. This makes it harder to plan your income stream, and there's always 3 months between dividend payment. So this could be hard from a motivational standpoint as well.

The solution is therefore to diversify your portfolio by when companies pay dividend. This means that if you own a company with the dividend above, then look for a company that pays dividend in February, May, August, and November in addition. This makes sure that you receive dividends way more often and can therefore compound your money even quicker (meaning more dividends). If you, in addition to this, can invest in a company that pays dividend starting in January, April, July and October, then you are all set for income every month.

If you are an investor starting out, you can also use the dividend carpet bombing strategy by investing in companies that pay monthly dividends. You can then stay on track from the start. An example of a company that pays monthly dividends in Realty Income Corporation, I wrote about them in this post: https://steemit.com/money/@nordal/earning-passive-monthly-income-from-stocks-2-realty-income-analysis-o

That is all I had for today, good luck investing. If you have any questions to the strategy or to me, just comment below.

Disclaimer: This analysis should not be considered as financial or investment advice of any kind. The provided information is only for informational purposes.


Passive incomes are the way.
You work hard at the beginning and then you enjoy the fruits of your hard work.

Good luck!

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