How To Pick Stocks For Cash Flow/Growth
Manage episode 451563841 series 2845715
Season 2 Episode 7 of Not Me, But You! Podcast
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The rate of return (yield if you invest in dividend stocks, ROI= Return On Investment) that you earn on your investments is very important. In this podcast, I explain how to pick assets with high rates of return. I also talk about growth stocks as well.
Think of your overall investment strategy being like a train. A train runs on 2 parallel tracks. But the individual tracks are separate, they are different. One of those train tracks (rails) is dividend stocks. The other track (rail) is growth stocks.
What are growth stocks? All the names of companies you already know: Apple, Google, Amazon, Microsoft, Nvidia, Costco, Home Depot etc. These growth companies typically pay very SMALL dividends. In part, because you make your money by "share price appreciation." That is the price/share going up about 10% every year.
Dividend stocks are "passive income." They pay you money (a dividend) on a schedule. The schedule is usually monthly or every quarter (every 3 months).
Inflation pushes consumers to spend more money. Why? Because inflation causes prices to rise on the products/services you continue to buy each year. We need to invest in assets that pay us a high rate or return that will outpace the rate of inflation each year. By doing this, we preserve our purchasing power of the pile of money that we hold.
What if you can't afford to buy "one whole asset?" Then buy "slices" of assets. I explain how to do this. I tell you which free website I use to pick high yield dividend stocks/growth stocks. I tell you how to evaluate/compare stocks.
Warren Buffet once said, if you want to be wealthy, then you need to find ways to make money while you sleep! I buy assets that either pay me on a schedule (bring me cash flow) and/or that go up in value each year, at a rate that is GREATER than the rate of inflation.
If you only have a small amount of money to invest each month, then you may want to begin with high yield, low cost per share, dividend stocks. Don't start with expensive (high cost per share) growth stocks. You can add in growth stocks later. But of course, in life, there are always exceptions to every rule!
Have courage today to pick one thing, and work on your dreams.
I'm not a financial advisor. This podcast is for education/entertainment purposes only. You will need to do your own research and accept responsibility for the results of any money you choose to invest.
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