Investing in the Stock Market for Cash Flow

When reading about the drop in BPs stock the other day it really peaked my curiosity. I had thought about stock investing for dividends before but when I calculated how much money on average you have to invest to get a return you could live off of it seemed like quite a bit when comparing to the same investment in ‘virtual real estate’.

It seems, on average you would have to have about €500,000 invested to get €20,000 in dividends per year and then you have to take into account inflation and taxes. Tax on portfolio income is 15% in the US (much better than earned income).

It could take us quite a long time to invest enough to get a reasonable cash flow but as they say, inch by inch – anything is a cinch. We can start to build it as another income stream.

I moved a little money to my brokerage account to make our first dividend stock purchase but before taking the plunge I decided to do some research. Another good saying to respect: Work as hard investing your money as you do making it.

I picked up this audiobook - The Little Book of Big Dividends by Charles B Carlson (I love the instant gratification of downloading audiobooks!) and started listening to it today at the gym.

I already picked up some good tips like – don’t look for the highest paying dividends as they are usually difficult for companies to maintain and could mean trouble is in the horizon. That was actually the first thing I looked at when I started researching.

I’ll share some more great advice from this book in the next post.