Financial Freedom With dividend investing by warren Buffett

 

 

How to Rich by investing   Dividend





Secret Open by Warren Buffett






Financial Freedom With dividend investing .Would not it be great if you do not have to work because you passive income (dividends) is at such a high level that exceeds your expenses? At a given time That is financial freedom! In this article you can read what the two most common forms of dividend investing and how to put it achieved financial freedom.

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What is passive income  anyway?


Passive income means that anyone enjoys, need no longer be working for the income for it is passive income. So you do not have time and effort to somewhere more stabbing which payment (money) enjoyed. In short, there is still money coming in without you there for work. Passive income can include:

interest paid on savings,
dividends or a reward for written articles

 



Dividend Investing





There are various forms of dividend investing, the most famous and interesting are
1) Dividend growth investing and
2) high dividend investing.


these two methods are discussed in. Dividend Growth Investing Dividend  Growth Investing implies that the investor buys shares in companies with more pay a dividend each year (= growth of dividend income).


In the United States, this is a popular phenomenon in Europe but lives much less. these companies, which are increasingly paying dividends each year, called "dividend aristocrats" .


Before a company can be so called, the company must have increased dividends. Example for 25 years in a row These are often solid companies with a good business model that already exist for very long.


On the Internet you can find such a list of dividend aristocrats. High dividend investing High dividend investing implies that the investor buys shares in companies with a high dividend, for example, in Business Development Companies (BDCs).



These are companies that invest in small businesses, and help - the name says it all - to develop these small businesses. A characteristic of a BDC is that it is at least 90% of the profits should cede to the shareholders.


As a shareholder, you have so soon a dividend yield of approximately 10%, which is obviously very interesting. For high dividend investors are real estate investment trusts  and utilities also possible. these two ways of dividend investing are the best ways to capture.



passive income from investments It lies on the personal situation (age, risk appetite, vision, income vs. expenses. Etc.) of each individual, which form is best suited. All in all, should ensure that more income is generated than is spent.



When is achieved financial freedom?





Financial freedom is achieved, if the dividend income exceeds expenses. Below each of these types of dividend investing an example of financial freedom is achieved. Dividend growth investing.
example Give your Rs . 25.000, - per year, then you have a dividend yield of 4% required a capital of Rs.  625.000, -. And mind you, the revenues grow each year because companies are shareholder-friendly,


returning more dividend every year! high dividend investing. Suppose you have Rs. 300,000, - and you get 10% on dividend income.



This means that you have a year Rs. 30.000, - receive. High dividend investing so you have less capital is needed for the same income. Mind you, the higher the return, the greater the risk.


Dividend Growth Investing  vs. high dividend investing






High dividend investing looks interesting at first glance, however, also remember that here sticking more risks. Again, the higher the yield, the greater the risk. Dividend growth investors often have shares in companies such as Coca Cola, McDonalds and Microsoft. These are great, reliable and reputable companies for decades and provide quality where every investor has a great trust.



High dividend investors investing among other BDCs that have to borrow money and this then lending again to small businesses that have yet to develop (and not yet well-established and reliable, and therefore more risk brings with it). For example, a fairly well-known BDC's Prospect Capital Corporation, a dividend yield of approximately 12%.



Resume





There are various forms of dividend investing, the two best known are 'dividend growth investing' and 'high dividend investing. High dividend investing is an investor in order to achieve financial freedom. Less capital With dividend growth investing, the investor receives each year more income from dividends, so the income is higher every year and spending will surpass increasingly.