How to Increase Your Dividend Income Without Lifting a Finger personal Finance

(Charlene Rinehart, CPA)

Dividend stocks offer one of the most convenient ways to earn extra income while you sleep. All you have to do is select the desired dividend-paying stocks in your portfolio and watch those dividend deposits flow into your account. The best part is that you can qualify for automatic dividend income growth without having to do anything extra on your part.

Below, we’ll dive into a tried-and-true strategy to help you grow your dividend income for years to come.

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Start earning dividend income

If you’re ready to jump-start your Dividend travel, you will need to invest in companies Which rewards the shareholders with dividends. Not every company does this, so you have to do something quick Research To make sure some of the companies on your watch list are dividend payers.

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See here how it works. When a company makes money, they can do two things:

  • invest money back in the company
  • Reward shareholders with additional income

Some companies will do a little of both. Take Microsoft (NASDAQ:MSFT), For example. This trillion dollar tech powerhouse continues Invest in Its Cloud Business, while paying an annual dividend of $2.48 per share (as of June 2022) to shareholders. But if you want to earn your first $1,000 in dividends From Microsoft, you’ll need about 404 shares of stock. At Microsoft’s current share price, you’d have to pay six figures to do so.

So you want to identify your goals and risk tolerance, and then research companies that align with that. If your goal is to invest in companies that increase their annual dividend every year, and you want Diversify your portfolio With companies beyond tech, you’ll want to direct your attention to one particular breed of stock. We will discuss about it further.

Opening up dividend growth opportunities

Some companies stick to the same annual dividend payment every year. Other companies have a track record of consistently increasing their dividends. These companies can be part of Dividend Aristocrats either Dividend Kings club if they have been in the game for some time.

Dividend Aristocrats have proven their commitment to shareholders by paying dividend increases every year for at least 25 consecutive years. Here are some examples of companies that have made it to the list:

  • beam
  • cardinal health
  • Kamla

Then on the list is a specific group of dividend payers who have paid and increased their principal dividends for at least 50 consecutive years. Here’s a preview of Dividend Kings:

  • Procter & Gamble
  • Colgate Palmolive-
  • johnson and johnson

increase your income while you sleep

Let’s say you invest in a company that has been crowned Dividend Aristocrat. The company paid an annual dividend of $3.48 per share last year and plans to increase that amount to $3.65 per share this year. It may not sound like a big deal, but it all adds up.

If you owned 1,000 shares of the company’s stock, you would have earned $3,480 last year. This year’s dividend boost will get you up to $3,650. That means you made an extra $170 without moving a muscle.

Imagine getting a dividend bump every year for the next 20 or 30 years. If the company continues to increase the annual dividend, your earnings will automatically increase as long as you hang onto the stock.

Investing in dividend growth stocks can prepare you for automatic increments for the rest of your life. While past performance doesn’t always guarantee future success, these companies have a proven track record that can help you get started on your journey.

Diversify your portfolio with dividend growth stocks

Establishing a Dividend Income Growth Strategy Doesn’t Mean You Should Abandon Other Stock Type and investment. Dividends can fit in a well-diversified portfolio of assets One that aligns with your goals and risk tolerance.

Start building your watch list Research, and look for companies that are increasing their dividends. Those small dividend increases each year can result in thousands of additional dollars over the long term. The best part is that you don’t have to lift a finger to earn your rewards.

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Charlene Rinehart, CPA There are positions at Caterpillar and Microsoft. The Motley Fool has posts and recommends Microsoft. The Motley Fool recommends Johnson & Johnson. The Motley Fool has one Disclosure Policy,

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