How to use the Stock Market to Build a Steady Passive Income Stream
by Tony Lee
Everyone is looking for a way to build some passive income but most of us are not looking in the right places. In this article, I am going to show you how to use the stock market to build a steady passive income stream.
The first thing to realize is that there are stocks that pay monthly dividends. Yes, you read that right. Most stocks pay quarterly but there is a good number of stocks that pay monthly and those are the ones that we are going to concentrate on to build a steady monthly income stream from.
First thing is first. You will need a brokerage account to buy and sell stocks. You can google that yourself and find one that you like. Compare the transaction fees and go with the one that is the most reasonable to you. After you've setup an account, make a deposit and get yourself ready to make some trades.
To find stocks that pay monthly, you can google 'stocks monthly dividend' or go to a website that lists monthly payers such as Dividend.com. Explore the lists of stocks, ETF's and REIT's that will pay a monthly dividend amount. With each of these stocks, you can choose either a cash payment or a reinvestment. If you are working and earning an income, you may want to choose the latter and have the monthly dividend reinvested. Instead of paying you a monthly cash payment, the company will take the amount and buy more shares with the money. Reinvesting the monthly dividend will help grow your investment and increase the number of shares you have. If you are no longer working and wish to earn a monthly income then choose the cash payment option. You can always take the money and run or you can take a portion and reinvest the rest, but you will have to reinvest the money manually. Choosing a cash payment is the most flexible but sometimes, you lose out on buying more shares at a lower price than if the stock company reinvested it for you.
When you have chosen the stock to buy, google the following dates:
Choose your stock wisely and watch your investment grow. Or if you are counting on a monthly cash payment instead, watch for the payment date each month and get ready to withdraw the cash from your account. Follow this article and you will build a nice steady passive income stream from the stock market.