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Now Is The Best Time To Build Passive Income

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Now is the best, and easiest, time to build passive income. If you have some extra money, you can use the stock market to invest in wonderful companies which are currently trading at discount prices.

Best of all, you can use the dividend payments these businesses issue their shareholders to collect monthly passive income cash flow.

I’ll explain how.

Certain companies issue regular cash payments to anyone who holds their stock. This can be anywhere from a few cents per share to several hundred dollars (if there’s a special event). If you by good, dividend paying companies, you’re able to build passive income over time.. Personally, I’ve been using this strategy for several years now, and here’s what the month of April is looking like in terms of payments:

  • Dividend #1: $18.15
  • Dividend #2: $2.31
  • Dividend #3: $28
  • Dividend #4: $29.23
  • Dividend #5: $0.50
  • Dividend #6: $17.64
  • Dividend #7: $115.73

Some of these payments are tiny, the smallest is worth less than one dollar, but they add up. Dividends #3 and #4 cover my utilities. Dividends #1 and #6 pay for a gym membership. And Dividend #7 takes care of some groceries. That’s not bad, considering the fact that I had to do absolutely nothing for this.

Buying and holding stocks is an easy way to cover your bills. And, it can allow you to greater levels of personal freedom.

If you’re able to invest $250,000 to $500,000 into stocks, you can easily live in a place like Vietnam, Thailand, or The Philippines without ever having to work again.

Why Now Is The Perfect Time To Build Passive Income

The world economy is tanking right now and many assets are losing their paper value. Wonderful, profitable, successful businesses are having their stock prices slashed as panicked investors dump their shares. This makes it a great opportunity for you.

You can swoop in, buy discount stocks, collect your dividends, and wait until prices recover.

The Vanguard S&P 500 is a great example, this is an index of the 500 biggest companies in America (meaning you own everything from Amazon and Walmart to Boeing and Facebook) and it is currently trading at the same price it was in September of 2017. That’s a pretty big discount.

Now Is The Best Time To Build Passive Income - VOO

There are plenty of other safe, stable businesses selling for reduced prices too. And we’ll look at some in a moment.

How To Find Quality Dividend Stocks

Many people assume the stock market is risky. They think of Bernie Madoff, Enron, and penny stock scams. In reality, there are plenty of great companies you can invest in for long-term profits.

It doesn’t take a genius to pick obvious winners like Coca-Cola, McDonald’s, or Waste Management. And, you can always buy indexes and ETFs which contain dozens (if not hundreds) of quality stocks. These are safe, stable ways to build wealth and grow your money.

While I’m not giving financial advice (do your own research!), here are a few investment opportunities worth looking into:

  • VOO – This an S&P 500 index and one of the easiest investments to make. You get the 500 biggest companies in America, plus a quarterly dividend check.
  • VYM – Another good index. This one is entirely dividend payers and nets you high cash flow on a quarterly basis.
  • KO – Coca-Cola, pretty much a brain-dead way to build passive income. The stock always preforms well and pays a generous dividend.
  • O – This is a real estate company called “Realty Income.” They pay monthly dividends, providing excellent cash flow.
  • WM – Waste Management, one of Bill Gate’s favorite stocks. They pick up garbage (always a need for this), and pay shareholders a quarterly dividend.

There are hundreds of other great dividend paying stocks out there. And, if you’re curious, here are some ways to research them:

  • Seeking Alpha – This is a free investment website where you can read about any publicly traded business.
  • Beating The Street – Peter Lynch is one of the world’s greatest investors (right next to Warren Buffett) . This book is written by Lynch and explains his exact strategies for picking quality, long-term stocks that beat the market. Essential reading.
  • Top Dividend Stocks – This is a monthly newsletter all about investing for cash flow. You’ll learn about all kinds of different stocks and investment opportunities from around the globe. And, there are often interviews with, or articles on, various investors and their strategies. Personally, I’ve gotten some good ideas from here and picked a few quality, obscure assets after learning about them. Well worth signing up for.

Final Thoughts

2020 is a great year for building passive income. Putting some money into stocks on a regular basis is going to net you consistent and ongoing cash flow. This means paying your bills, rent, or (ultimately) enjoying financial freedom.

If you’ve never bought a stock before or were waiting because the market was “too high,” this is your opportunity.