Dividend Investing For Beginners
Рет қаралды 30,786
Күн бұрынIn this video, I provide a Beginner’s guide to dividend investing. I’ve been growing my dividend portfolio for over 13 years and now generate an average of more than £1100 a month. All journeys start somewhere however and I demonstrate how to achieve a simple first goal of generating enough passive income to cover the cost of a cup of tea every day. I demonstrate how to do this in real time by using the trading platform Freetrade to buy enough shares in a typical FTSE 100 company to afford the cost of a daily cuppa. I also show my own journey and the importance of setting small achievable targets along the way. The idea is not to focus on the final destination but instead on the next target. In this way we remain focused and motivated as we work towards the next short term target. This may help you also to appreciate the psychology of investing and what an important factor this to have the correct investing mindset. I then discuss possible companies one might invest in to generate reliable dividends. I also reveal a selection of Exchange Traded Funds which could also be used to generate passive income while increasing diversification. I’ve growing my portfolio for 13 years by simply investing spare money each month into large established companies mainly UK companies in the FTSE 100. I follow a similar strategy to Warren Buffett. Many of these companies are global giants earning much of their revenue from around the world. I prefer large established companies which pay reliable dividends simply because I find this highly motivating seeing monthly payments flowing in. I always reinvest the dividends and allow them to compound over time. Regular investing into dividend shares allows you to generate a stream of passive income which grows over time. The end goal is to achieve financial independence and retire early. I keep an emergency cash fund in Premium Bonds. My stockbroking platform is Barclays Smart Investor which allows me to buy individual companies in the UK and a wide range of funds including Exchange Traded Funds from around the world. I make good use of a stocks and shares ISA to protect my investments from tax. My videos act as a good beginner’s guide to investing. The companies / investment instruments I mention in this video are Sainsbury’s (SBRY), iShares Core FTSE 100 ETF (ISF), iShares UK Dividend EFT (IUKD), SPDR S&P UK Dividend Aristocrats ETF, Vanguard FTSE All-World High Dividend Yield ETF (VHYL)
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Disclaimer
The information presented on this channel and in these videos is for entertainment purposes only and is not financial advice. The price of shares can go down and well as up. Investing in shares is not appropriate for everyone so please do your own research.
@TheCompoundingInvestor Жыл бұрын
What investing target are you currently working towards?
@10783247jp Жыл бұрын
£1000 dividends a year. I enjoy measuring my dividends in real world items so I use Meal deals as a progress tracker 😂
@philr8971 Жыл бұрын
Honestly at the moment I am just aiming to just improve my dividend income each year. It’s as simple as that that way I don’t have a time pressure on me to hit a target by a date etc
@TheCompoundingInvestor Жыл бұрын
That sounds like a plan. There is no magic formula for any of this. Best wishes.
@malcolmbirkett1347 Жыл бұрын
I'm trying to invest as much as I can into my portfolio ,On a monthly basis. .
@TheCompoundingInvestor Жыл бұрын
@@malcolmbirkett1347 That sounds like a solid plan Malcolm. Good luck on your journey
@MrRoyck10 Жыл бұрын
Fantastic, your channel was instrumental for my averaging 71p per day, £20.44 per month and £260.02 per annum, I started February 2022 and I am not drinking away my free cuppa daily but reinvesting it chasing a daily Big Mac meal (albeit on a low carb diet). Thanks for sharing.
@TheCompoundingInvestor Жыл бұрын
LOL. Thanks so much CK 888. Onwards and upwards towards that daily Big Mac!
@dhruvmaurya347 Жыл бұрын
My next target is pay my gas and electricity bill
@kippsguitar6539 Жыл бұрын
If you had bought energy companies it would have paid it for you plus a lot of change
@brianyegerlehner9157 8 күн бұрын
Love this. I’m in the US and I’ve been doing my best to diversify my portfolio. I’m 25 with a solid 28,200$ invested. I hope I can retire by the time I’m 55
@TheCompoundingInvestor 8 күн бұрын
Plenty of time on your side for the magic of compounding to do it’s thing. All the best on your journey
@danielwright3826 Жыл бұрын
Thank you and thought provoking. Here in AU (Banking) part of what is assessed includes a person's GLEE ie say 36,500 pa ($100 pd). Consider if able to contribute $10 - $20 pd and Inc over time so as the combination of Inc returns and this amount ultimately reaches your goal = GLEE being covered with regular (asset) purchases ie M,W...together with compounding. Keep punching 👊
@nomadicsouls3290 Жыл бұрын
I’m working towards retirement income. Got 20 odd years to go and currently sitting at £292k fully invested in VWRP. My goal is to generate £1k per week by the time I retire.
@TheCompoundingInvestor Жыл бұрын
Wow that’s excellent progress and quite a bit of time on your hands for further compounding. Good luck on the rest of your journey
@r1273m Жыл бұрын
I've tried other investment videos but this is my favourite by far. Keep up the good work.
@TheCompoundingInvestor Жыл бұрын
Thanks so much, I really appreciate it.
@macadamia_alittlebitnuts Жыл бұрын
Impressive! Wish I’d known about investing in my teens, or twenties!
@TheCompoundingInvestor Жыл бұрын
Thank you. Never too late to start. I think we all wish we had started earlier.
@DrModGTA Жыл бұрын
I cannot wait! I am finally investing at age 24, I feel I should Have started earlier but I'm not keeping single penny in my bank account that generates me no overall benefit, I'm going to diversify my portfolio and always put 80% of my monthly savings into stocks that pay dividends rather than in the bank! I can't believe when I talk so friends my age and they are comfortable keeping their years of savings at such a young age just in a bank account gathering dust!
@TheCompoundingInvestor Жыл бұрын
That sounds like a plan and you have plenty of time on your side to ride out market fluctuations. All the best my friend
@duncanemery6264 Жыл бұрын
Honestly mate that was such a good way of explaining it keep up the good work av just hit my target of £100 per week for doing nothing
@TheCompoundingInvestor Жыл бұрын
Excellent work Duncan. £100 a week is a fantastic milestone. Thanks so much for your support
@catseyes8377 Жыл бұрын
Duncan which companies have you invested in to generate £l00 per week
@duncanemery6264 Жыл бұрын
@@catseyes8377 Loads mate never spent any just reinvested divs
@samr8603 Жыл бұрын
Great video again. One thing people forget even if dividends were abolished we would still have a lot of money we could live off taking money out each month for living etc.
@TheCompoundingInvestor Жыл бұрын
That's a great point Sam, and the share price would potentially increase further as the money would be going back into the business / and or share buybacks. Thanks for your support.
@retirementinvestor7099 Жыл бұрын
Reached my Goals retired at 55 and living off dividend income £660 this month so far - I mainly use investment trusts and REITs rather than stocks I use Merchant’s Trust for ftse 100 firms . I know charges are high but the IT structure allows them to hold 15% back in good times to allow them to pay divs in bad times, no divs were cut during Covid in fact they increased. I think their divs have increased for past 20 years +
@TheCompoundingInvestor Жыл бұрын
Thanks so much for sharing your journey Retirement Investor. This will be very useful for others to read. Well done indeed on your achievements.
@youknowtherules8888 Жыл бұрын
Can u invest in REITS using Freetrade?
@TheCompoundingInvestor Жыл бұрын
Yes I believe you can invest in REITs
@Tommybotham Жыл бұрын
Excellent video. No bullshit, no pontificating, just straight up pragmatism and objective statements.
@TheCompoundingInvestor Жыл бұрын
Thanks for your support Da Bx. Glad you enjoyed it. All the best on your journey
@gratitudeinvesting Жыл бұрын
Not Nutritional Advice😂😂😂😂 That line had me!
@sbwildlifeandnature6637 Жыл бұрын
I’ve just started my dividend journey (I got around £50 last year but it wasn’t my focus) and I’ve done my own forecast for the next year and I’m looking at about £200 so far. I have more capital I will drip feed into my higher conviction dividend stocks over time as most stocks seem a bit inflated right now compared to when I was more aggressively buying in may-early July. I’d love to hit £250 in my first year and I think this is a reasonable target. I’ve also started buying premium bonds and will use that as an emergency fund as I think it’s a wise move. Thank you for your inspirational content 🙂
@TheCompoundingInvestor Жыл бұрын
Thanks so much for your support and sharing your investing journey. I like the way you are setting targets and working towards them. I find premium bonds really good as an emergency fund and also a bit of competitive fun at the start of each month. All the best on your investing journey
@philipmanning7352 10 ай бұрын
Good video school leavers should watch this
@magicfinance6968 Жыл бұрын
Nice video BTW on a side note would you think of doing updates on your Portfolio when you change or rebalance your Portfolio. The shorts you did with monthly dividends is an example. Just a thought, it seems you have a growing following and content boosts views. You may become larger than you think. You have witty content, balanced views(you give none which is good), weekly updates, very informative and so on. On a side note I bought back into GSK and sold Aviva, rebalance Portfolio is a good way forward. The market moves fast with news and sometimes people miss an opportunity.
@TheCompoundingInvestor Жыл бұрын
Thanks Magic Finance for your kind words and suggestion. I really appreciate it. I’d like to post more regularly but with a full time job there is a balance / compromise on time to be made. Regarding Aviva, I took the capital (recent return of capital) and reinvested it elsewhere. I haven’t done anything with the GSK / Haleon split although I notice Haleon has not done particularly well so far. Perhaps it will be taken over at some point so I’ll hang on for now. Recent purchases over the last month or so... Unilever, S&P500, Rolls Royce, Croda. I haven’t really sold much this year except giving BP and Shell a bit of a haircut as they were dominating the portfolio as I loaded up with them during the Covid crash.
@driftingintoretirement Жыл бұрын
Target are a great way to keep focused.
@philr8971 Жыл бұрын
I really like this. A different take on goals… So many investors lose hope with not seeing the “gains” or “growth” they think they should be getting. I remember my first dividend payment a whopping 50p, I was so happy. Since then I have tracked my dividend growth on a monthly but looking at it on a daily basis may also be interesting. Thank you as always for taking the time and effort for a very entertaining video
@TheCompoundingInvestor Жыл бұрын
Thanks so much Phil, I really appreciate it. The flow of income however big or small can be so motivating and seeing it rise from year to year is a really powerful thing. I remember my first dividend from Aviva, it was a lightbulb moment for sure. All the best on your journey.
@remstarsezso4135 Жыл бұрын
Great video mate... I used to go big on VHYL but with nearly half its weighting in USA it was some what a copy cat of an S&P 500 ETF, so at times it would move up and down in the same way
@TheCompoundingInvestor Жыл бұрын
Thanks so much and I totally agree with you on VHYL. A huge proportion of it is in US stocks and the fees are lower with an S&P 500 tracking ETF
@MrPWalden Жыл бұрын
I’m so far on 12.5p per day. Never really thought about it like that but pleased with my journey so far. I started my journey on the 21st December 2021. Thank you for sharing your adventure and inspiring me to start my own!
@TheCompoundingInvestor Жыл бұрын
Glad you are enjoying the process. Will be fascinating to see that grow as time goes by. Excellent work.
@alastairdickson5131 Жыл бұрын
In the past year I’ve earned £5000 in dividends which I reinvested Hoping for £6000 next year that’s my target.
@TheCompoundingInvestor Жыл бұрын
Excellent target and amazing progress Alastair. Onwards and upwards towards £6000. Best of luck
@BotanixB Жыл бұрын
British stocks are great for international investing with tax free/pension account thanks to lack of withholding taxation. Got some of those, aside them Airtel Africa AAF is great for growing emerging markets exposure.
@TheCompoundingInvestor Жыл бұрын
Some wise words there BotanixB. Thanks so much for watching and commenting. Good luck on your investing journey.
@mpersard Жыл бұрын
Thank you for sharing this video. Love the way you break this down in your videos. As new investors we are in a race to get rich quickly, so dividend investing can feel frustrating at first but it does not work like that in reality. So happy to have got to £100pm with my own snowball. Always happy to hear that ping On my phone and read about a new dividend payment. My ultimate aim over the next 10 years is to get to £1000 per month. You have shown that by being consistent this is achievable. 👌👏
@TheCompoundingInvestor Жыл бұрын
Great target setting Mr P and you are making excellent progress. £100 a month was my toughest target to reach for sure and I was seriously hooked at that point. All the best.
@trunky3315 Жыл бұрын
Really liked this video. The food made me smile. Well done for the #40 pounds a day in dividendes, really impressive and inspiring, I am almost at #25 and I am already really happy, it helps a lot, especially with the inflation nowadays. I wish you good luck in the investments and increasing your dividendes. Bon appetit !
@TheCompoundingInvestor Жыл бұрын
Thanks Trunky, all the best my friend
@jimmysmith3191 Жыл бұрын
Really great videos and very inspiring. I'd felt my investing had become very unfocused and your videos have helped me focus on dividend investing and kept me motivated. Keep up the good work
@TheCompoundingInvestor Жыл бұрын
Thanks Jimmy and I agree, motivation and the psychological aspect of investing is so important. Setting small targets along the way and focussing only on the next step is a good way to achieve this. All the best for 2023
@MrButuz Жыл бұрын
Brilliant, time to get me free cuppa tea! I'll have to re-do the figures though as I need a sweetner in it every day ;)
@TheCompoundingInvestor Жыл бұрын
Nice one MrButuz!
@MrButuz Жыл бұрын
@@TheCompoundingInvestor I take it the barclays stocks and shares ISA you mention is more for seasoned investors? I saw on the page lots of mentions of fees and stuff which put me off a bit? I dont trust a lot of these random investment websites you see around and in youtube ads. Though I will look at freetrade as you reccomended it. Thanks.
@TheCompoundingInvestor Жыл бұрын
I’ve been with Barclays since the start (2009). They are fairly expensive but I guess you pay a bit more for a traditional platform which has stood stood the test of time. I recently opened a Freetrade account for my ‘viewers portfolio experiment’ and no issues so far. Still relatively new I guess and untested. If I was starting again from scratch I’d still probably use a traditional platform but that’s just me. I think I’d go with Hargreaves Lansdown as they are a bit cheaper than Barclays.
@arigutman Жыл бұрын
Great video, I really enjoyed the content - thank you. I think now is the perfect time to really be doubling down on value investments and dividend stocks for the sake of our market. However, regardless of the conditions we are experiencing DGI just works... I started in 2019 and now my portfolio is sitting nicely above $100K at $108K... onward to $200!
@TheCompoundingInvestor Жыл бұрын
Great work Ari and thanks for your support. Good luck with your investments and your great finance channel
@dankett5953 Жыл бұрын
Excellent channel, many thanks .
@TheCompoundingInvestor Жыл бұрын
Thanks so much Dan, I really appreciate it. Good luck on your journey
@sybaritic2001 Жыл бұрын
Yet another excellent video. You did particularly well in 2013 I see, and nearly doubled your daily dividend in a year!
@TheCompoundingInvestor Жыл бұрын
Thanks Sybaritic. I recall around that time I was really focussing on dividend companies with higher yields and transitioning away from growth stocks and more speculative companies.
@giannisioannou8305 Жыл бұрын
amazing video editing !
@TheCompoundingInvestor Жыл бұрын
Thank you Giannis. I really appreciate it. All done on an old iPhone 10 with the free iMovie app
@KNLP23 Жыл бұрын
Nice one, you must be in the position to eat afternoon tea at the Ritz 🙂🙂🙂. Well done 👏👏👏
@TheCompoundingInvestor Жыл бұрын
Lol. Thanks K N and all the best on your journey
@Dr.JubairsFinance Жыл бұрын
I truly loved this video, good luck with your Investing journey
@TheCompoundingInvestor Жыл бұрын
Thanks Jubair. Good luck with your investments and your finance channel 👍🏼
@barrywhite5899 Жыл бұрын
I love these videos. Thanks for the effort involved to create them. I find saving as a hobby , sad as that may sound and now I then I do need to stop and actually treat myself occasionally. It’s addictive, investing, dividends, checking the ex-div date, logging into your platform to check the dividends have been paid, checking when it’s been reinvested. Monitoring share prices to guess a good time to top up if the share price has dipped. Then of course looking at all that free money that arrives. My aim, like many is to put as much away as possible, then as I get older hopefully I can slow down and find a part time job with money coming in from investments. That’s my plan anyway.
@TheCompoundingInvestor Жыл бұрын
I can relate to all of this Barry. The whole process can be very absorbing especially when you see the capital and dividends growing and then accelerating. Good luck on your journey.
@driftingintoretirement Жыл бұрын
Agreed, it is a hobby.
@myfinancialjourney887 Жыл бұрын
Great video once again 👍🏽
@TheCompoundingInvestor Жыл бұрын
Thank you so much
@RockyRumbles Жыл бұрын
Thanks for the video!
@TheCompoundingInvestor Жыл бұрын
You are welcome
@LRDefender1968 Жыл бұрын
Morning Sir, Another fascinating video, I’ll be sharing this with my 20yr old son, we’ll be setting up his SIPP next week, a great way to explain his future journey and how it works in a basic but extremely interesting way. Just checked my own stats, from August 2021 to August 2022 I have received £9,376.33, I do have a lot of shares that are not dividend paying but this will change over the course of time when the market allows, my main goal in the near future is to achieve £1000 a month on average, I believe this to be possible in the next year to 18 months, I’m really enjoying the journey. Keep them coming and kind regards Tony
@TheCompoundingInvestor Жыл бұрын
Thanks so much for sharing your journey Tony. £1000 a month is a great target to aim for. That's a very impressive total so far. Good luck to you and your son on both your investing journeys
@potnoogle5780 Жыл бұрын
All this time I have been following stock Moe, Kenan Grace, and a few others. Only started watching your channel since yesterday.
@TheCompoundingInvestor Жыл бұрын
Thanks Pot Noogle and all the best on your investing journey
@TobyNewbatt Жыл бұрын
Great vid as always mate! Love the idea about starting really small as you did 👍
@TheCompoundingInvestor Жыл бұрын
Thanks so much, Toby. I really appreciate it. All the best mate!
@connormcleod9595 Жыл бұрын
Just under £10k in two years.. Long way to go before I get to your level sir.
@TheCompoundingInvestor Жыл бұрын
Great work Connor, all the best on your journey
@paulatkinson2933 8 ай бұрын
Top video really interesting, just found the channel. If you had a starting pot of £50k today Oct23 would you max PB or dividend paying ETFs. Great info. Cheers
@TheCompoundingInvestor 8 ай бұрын
Thanks. That’s not an easy question to answer as everyone circumstances are different e.g. tolerance to risk, size of emergency fund, time horizon etc. My own method was to first become totally debt free including the mortgage. Then I could concentrate solely on investing without any financial distractions. When the market was soaring and breaking records I’d put less in and buy premium bonds with some. When the market was crashing I’d buy fewer premium bonds and add more into the market to capitalise on cheaper prices
@kelle_li Жыл бұрын
Another fab video, entertaining and informative. Do you take value into account? For example I love Diageo too but at 3880p for me is quite over valued. It's PE ratio is higher than Alphabet and Meta! But maybe we are paying a premium for their strong portfolio of brands?
@TheCompoundingInvestor Жыл бұрын
That's a very valid point Liam. There are times when I've maxed out the ISA so I need to buy something which I believe in long term but does not pay a very high dividend (to keep my non-ISA dividends below the £2000 limit). Diageo fits the bill for this purpose. I have been buying more of them this year but stopped a while back as I saw better value elsewhere. Mainly been focusing on the S&P 500 and of course Unilever over recent weeks.
@kelle_li Жыл бұрын
@@TheCompoundingInvestor I would love to see diageo pull back to around 3000p if possible! I would load up for sure
@mattsennett Жыл бұрын
Really good video as always 😀 A mix of personal experience and motivational advice for new investors that should help some join the compounding family 👍🏻
@TheCompoundingInvestor Жыл бұрын
Thanks so much Matt. I really appreciate your support.
@dubsdolby9437 Жыл бұрын
Left the rat race at 53 two weeks ago. Dividend isa is really important as all your income is tax free but does take awhile to build up 20 yrs plus unless your lucky on a aim stock or similar. Dividends aren't guaranteed plus your initial capital can fall but hey Compounding is the eighth wonder of the world 🙂 one tip be patient and wait for 52 week lows you can pick up some great yields if your lucky I don't really touch anything under 6%
@TheCompoundingInvestor Жыл бұрын
Thanks dubs dolby. That’s really impressive and thanks so much for sharing. Patience really is the key and of course good use of a stocks and shares ISA. What countries / sectors are you mainly invested in?
@dubsdolby9437 Жыл бұрын
@@TheCompoundingInvestor thanks. My main biggies are legal and general ,direct line ,rio tinto . British American and imperial brands. Vodafone, m & g insurance and a few more. Recently got into more etfs mainly American Market. I really look to buy at close to year lows if possible foe a greater yield 🙂 from experience you get maybe 2-3 chances a year to get those sale prices 👍
@TheCompoundingInvestor Жыл бұрын
@@dubsdolby9437 Thanks that’s very useful. I hold fairly similar companies and tend to add more when I see bargains. Bought Shell and BP quite aggressively during the pandemic. Also buying a fair bit of an S&P 500 ETF recently. First got into that when the US market dipped dramatically at the start of covid.
@dubsdolby9437 Жыл бұрын
@@TheCompoundingInvestor ditto ha! Think I got shell at around £13 sold about £19 and bp sold wish I'd kept abit longer tbh. Legal and general has been the most solid performing stock 👌
@user-uj2sb5so1w Жыл бұрын
Young and have begun investing. have chosen an etf along with investing in companies such as unilever , ba tobacco, bp , national grid , green coat and aviva . Put a portion of my monthly earnings in and enjoy researching new companies to invest in .Your videos have opened my eyes thank you
@TheCompoundingInvestor Жыл бұрын
Glad you are enjoying it and you are clearly doing plenty of research. It can get really addictive once the dividends start rolling in. Good luck on your journey.
@user-uj2sb5so1w Жыл бұрын
@@TheCompoundingInvestor just worried about the economy down the line but I feel if I keep at it will work out in the long run 🤞
@rogerandout808 Жыл бұрын
I'm looking at building out for a beer a day or a night at the pub once a week!
@TheCompoundingInvestor Жыл бұрын
What a great target Roger. All the best!
@rogerandout808 Жыл бұрын
@@TheCompoundingInvestor Cheers! 😂
@glennrao7420 Жыл бұрын
I’m from Australia and I’m 51 and generating approximately $127,000 pa in dividends. I want to grow this to between $360,000 to $480,000 pa in passive income each year.
@TheCompoundingInvestor Жыл бұрын
That’s amazing. How long have you been investing and in which sectors?
@glennrao7420 Жыл бұрын
@@TheCompoundingInvestor, my strategy has been to invest in high growth US shares and then convert them to high yield Australian shares, ETF’s and Managed Funds. This has served me well over the years, as Australia has Franking Credits on the majority of its shares, which means that income from dividends and distributions are taxed very favourably, in comparison to earning that same amount of money through working in a job. I would rather earn an income from dividends and distributions than from working in a job. I do however do both at the moment, so that I can divert some of my active income into shares, ETF’s and Managed funds, and then reviving passive income. My Australian shares are spread across several sectors including banking, energy, mining, healthcare, utilities etc…
@TheCompoundingInvestor Жыл бұрын
Thanks for sharing your story, Glenn and well done indeed. As you say it gives you options regarding work. It’s great that dividends are not taxed too heavily in Australia. Nice one 👍🏼
@glennrao7420 Жыл бұрын
@@TheCompoundingInvestor, thank-you! I still have a little way to go but it is very satisfying seeing the larger amounts of dividends and distributions appear in your bank account for doing nothing. I make it a rule to reinvest at least 10% of what I receive back into my Managed Fund. I did use reinvest all of my dividends/distributions but I’m now at a point where I would like to enjoy that money. No point being the richest person in the graveyard.
@derekdrew7922 Жыл бұрын
Great beginners guide video! However, rather than starting off with buying shares in individual companies, it may be safer for beginners to first start buying one of the excellent ETFs you've highlighted and then, at a later date, start buying shares in individual companies. I recall having bad experiences with BP and Tesco who stopped paying a dividend for a while. At least with ETFs you should always receive a dividend since they contain many companies. Just a thought! Keep up the great content!
@TheCompoundingInvestor Жыл бұрын
Thanks Derek and I agree with you concerning the ETFs. It’s a great way to start. I’ve been buying more of those recently in particular the S&P 500 (IUSA) as I’ve maxed out the ISA and need something with a lower dividend yield to keep below the £2000 limit. The FTSE 100 tracker (ISF) is another one I’ve been buying in recent years. ETFs were not a mainstream thing when I started this portfolio but I think they are an extremely good asset to have.
@derekdrew7922 Жыл бұрын
@@TheCompoundingInvestor Absolutely. I actually divide my dividend shares into three distinct categories: Individual companies (50%) , ETFs (40%) and REITS (10%). I'd be interested to know do you consider such percentage splits and categories when developing your own dividend portfolio or you don't have any particular percentage targets for shares, ETFs or REITs? Your videos have been very helpful to me in developing my own dividend portfolio and I am very grateful for that.
@TheCompoundingInvestor Жыл бұрын
That's a good question Derek. Since EFTs have become mainstream I'm starting to favour them more and more. It gives me greater diversification and also overseas exposure. I still like individual companies however as when I see bargains I can take advantage for example Shell during the pandemic and Unilever this year. I think I'm around 90% individual companies and 10% ETFs at the moment but I really want this to be more balanced. Perhaps a 50 : 50 split would be something for me to aim for, going forward.
@derekdrew7922 Жыл бұрын
Many thanks for getting back to me on this. It's reassuring to know that I'm not too far off the mark with my individual company ETF split. I'm now in my mid 60s. My idea, as I get older, is to slowly increase the weighting of ETFs and slowly decrease the percentage of individual companies thereby gradually decrease my portfolio risk and increase the certainty of receiving dividends and eventually end up with a one third individual company and two thirds ETF split.@@TheCompoundingInvestor
@ryanmilner7169 Жыл бұрын
Great video. Instead of buying all those individual shares why not just buy isf etf or the other one. ?
@jonsmyth8353 Жыл бұрын
Hi Compounding Investor. Great simple video. May I ask how much in total you have invested, how much has this grown by and what level of investment is required to generate the average £1100 per month passive income. Like you I too want to quit my job.
@TheCompoundingInvestor Жыл бұрын
Hi Jon, thanks for visiting the channel. A few weeks ago I did my latest portfolio update. In that video I do a complete breakdown of all my holdings and how much I have in them. Towards the end of the video I show how much has gone into the portfolio since 2009 and the current performance. You will probably find it quite useful as I think it has everything you need.
@laurynassimanavicius2859 Жыл бұрын
I just started this year and I would like to make 200 pounds this year in dividend :) so far since I started investing in April I made about 140 pounds in dividend :) I have mainly uk stocks :) but two of my stocks is American one of them is pharmaceutical company Merck :) and other one investment trust which pays monthly dividends and has over 8% dividend and been increasing dividend for last 20 years
@TheCompoundingInvestor Жыл бұрын
sounds like you are enjoying setting targets and seeing those dividends rolling in. All the best on your journey
@catseyes8377 Жыл бұрын
How much did you invest and in which companies?
@johnvonhorn2942 2 ай бұрын
From a cup of tea to Brewster's millions.
@TheCompoundingInvestor 2 ай бұрын
Not quite there yet but I’ll keep at it
@karinekarano Жыл бұрын
Love your channel, I just hope you make it to retirement, what with all that junk food consumption.
@TheCompoundingInvestor Жыл бұрын
Thanks Jamie, I’ve cut down on the apple pies at least
@dreadpiratebuffett8208 Жыл бұрын
Thank you so much for making this video. Extremely inspiring. Question: Why just UK shares?
@dreadpiratebuffett8208 Жыл бұрын
Do you buy non-UK stock outside of your ISA?
@TheCompoundingInvestor Жыл бұрын
Thanks for watching and commenting. My Barclays platform has only ever allowed me to buy individual UK companies and not overseas shares. I’m gradually getting into ETFs however including the S&P500
@TheCompoundingInvestor Жыл бұрын
@@dreadpiratebuffett8208 I buy an S&P500 ETF outside of the ISA
@dreadpiratebuffett8208 Жыл бұрын
@@TheCompoundingInvestor Thanks. Love your unboxing videos each month. In terms of yout stocks, are you nervous about the debt loads with the likes of DGE and NG? (More so NG)
@TheCompoundingInvestor Жыл бұрын
Thanks. I'm glad you like the unboxing videos. I think high debt with NG is common throughout the industry and they basically have a monopoly, however if interest rates continue to rise then yes there could be a problem. If we have a change in government there is always the fear of nationalisation and this is always at the back of my mind. Not too worried about Diageo. They will do ok in a recession. People tend to keep buying their products.
@tonyb9185 Жыл бұрын
Hi I have a question? How do you get dividends so if I buy shares via Barclays or eToro how does they companies know you own the stocks and shares. I have never done this thanks
@TheCompoundingInvestor Жыл бұрын
Hi Tony. The share dealing platform has to notify a central register. The company who pays out the dividend pays the platform a lump sum and the platform then divides up the dividends between the shareholders. This sometimes takes a day or two. In over 13 years I’ve always received all my dividends from Barclays without any issues. Just in case you don’t know this, always best to use a Stocks and Shares ISA if you intend to invest for the long term as dividends will be tax free. Outside of an ISA you have to pay tax if your dividends go above £2000 a year. This may not be a concern initially but say 10 years down the road you may wish you had started with an ISA. I was late starting with my own ISA and made things a little more difficult. Good luck 👍🏼
@sornreed 7 ай бұрын
Rookie here. How does one decide on one's choice of trading platform?
@TheCompoundingInvestor 7 ай бұрын
I’ve done a video on this subject. I’ll leave a link to below. None of this is investment advice of course, only what I personally would do in my own situation. For long term investing I’d personally choose a stocks and shares ISA and if I was starting out with a smaller portfolio then I’d probably choose a commission free platform like Trading 212 . If I was only investing in Exchange Traded Funds I’d consider InvestEngine as the costs are very low. Some investors with very large portfolios however might choose the more traditional platforms like Hargreaves Lansdown. They have better customer service and have stood the test of tile with many decades of experience. I use a Barclays Smart Investor which is a traditional platform and I’ve been with them for 14 years. The downside is the fees and ongoing charges are more expensive. I hope this helps. Which Stocks and Shares ISA For 2023? kzfaq.info/get/bejne/pMBhh66Wl8uZZY0.html
@tommarsters2453 Жыл бұрын
Would be interested to see how much you invested each year to reach the level you have now. So obviously for the first year to raise £8 a month how much did you put in? Will show the level of compounding you have too in the later years!
@TheCompoundingInvestor Жыл бұрын
That’s a good suggestion Tom. I’ve not looked at that before but I’m pretty sure I should be able to dig that data out at some point for a relevant video
@tommarsters2453 Жыл бұрын
@@TheCompoundingInvestor my creator fee is 5% of the videos earning! 😂
@TheCompoundingInvestor Жыл бұрын
That will be somewhere in the region of £1 then 😀
@tommarsters2453 Жыл бұрын
@@TheCompoundingInvestor everything is worth having!!
@DRAGGOFFICIAL Жыл бұрын
@@tommarsters2453 equal to one cup of tea without milk or sugar :)
@simonspencer3108 Жыл бұрын
Nice video. My own view of this is that a single stock - say Vodafone or whatever - needs to generate a higher % dividend than an ETF for it to be worth holding it. Any view on that idea?
@TheCompoundingInvestor Жыл бұрын
I would generally agree Simon. However in my case there are times when I still buy stocks below the yield of the ETF for example at the moment I've filled my stocks and shares ISA so I need to buy quality companies outside of the ISA with lower dividend yields in order to keep dividends held outside the ISA below the tax free allowance of £2000 a year. Secondly a company such as Diageo may pay a lower dividend than the FTSE 100 ETF but they grow their dividend faster than most so the return on your original capital will probably be quite significant over the long term. A final reason why I might buy a company with a lower yield is if it is experiencing a short-term shock and therefore a bargain. For example when BP stopped their dividends after the oil disaster I saw this as an opportunity. The share price had crashed but I suspected their dividends would return in the future.
@simonspencer3108 Жыл бұрын
@@TheCompoundingInvestor Thanks for the decent reply….You might also think bout buying the Acc version of ETFs rather than low yielding stocks? You probably know more about this than me though….
@TheCompoundingInvestor Жыл бұрын
unfortunately distribution and accumulation versions are both liable for dividend tax in the same way. With the accumulation version a dividend was still technically paid but automatically reinvested instead of you actually receiving it. The amount is still liable for tax.
@vicobosa Жыл бұрын
Great video. I'm looking to start my dividend journey but have questions about taxation. I currently have a Stocks & Shares ISA in Vanguard with some ETFs. Would I need to transfer my ISA to Freetrade in order to not pay tax on the dividends or could I hold an account in both?
@TheCompoundingInvestor Жыл бұрын
Thanks Vincenzo. As far as I know you can’t hold 2 ISAs of the same type within the same tax year. You can have more than one stocks and shares ISA provider only if they are in different tax years.
@vicobosa Жыл бұрын
@@TheCompoundingInvestor Thanks for the promp reply! So to avoid tax I would have to sell my Vanguard ETFs and move my ISA to Freetrade? If I keep as is and open a account on Freetrade I will face tax on the dividends there?
@TheCompoundingInvestor Жыл бұрын
@@vicobosa Outside of an ISA in the UK you are allowed dividends of £2000 a year without needing to pay tax. If your dividends are above that then you will need to pay tax on the amount which is above the £2000.
@vicobosa Жыл бұрын
@@TheCompoundingInvestor Excellent, thanks a lot!
@davidprice9933 Жыл бұрын
Great video mate. I follow the 10-20 principle. I invest minimum of 10% of my wage and pay myself 20% of my yearly dividends (with that I pay off an interest free loan I lent myself, currently got a 6k driveway I’ve got to pay off, which should take about 18 months to pay off. I’ll let you work out the maths of my total dividend income) I’m surprised you don’t do the same mate as you’re still reinvesting 80% of your dividends but able to realise some capital to pay for things you don’t really want to buy ?
@TheCompoundingInvestor Жыл бұрын
Thanks for the suggestion David and explaining your own strategy. I’ve not heard of the 10-20 principle. Could you point me in the right direction so I can read more about it or is it something you have developed yourself? In my own case I don’t want to withdraw any funds from my stocks and shares ISA and obviously want to max out the 20k a year allowance as much as possible. For emergency funds etc I have the full amount of premium bonds which I can tap into when needed.
@davidprice9933 Жыл бұрын
@@TheCompoundingInvestor it comes from the richest man in Babylon ( you can listen to it free on KZfaq). There a some very good money rules to live by
@TheCompoundingInvestor Жыл бұрын
Thanks David, I’ve been wanting to read that for some time. Just finished the Psychology of Money. I’ll be sure to check it out. Thanks
@BobMc87 Жыл бұрын
Great videos! New subscriber.... I'm looking to start investing, but still unsure of the process. Basically if I put in £100 to the Ftse100, and it pays out dividends of 5%, twice a year. Does that mean I'll get 5% of my initial £200 equalling £10. Then re investing it, the next dividend pay out will be 5% of £210 and so on? Very new to this! Again great videos!
@TheCompoundingInvestor Жыл бұрын
Thanks Bob, much appreciated and all the best on your journey. So basically the FTSE 100 pays out about 4% a year so £100 invested would earn £4 in dividends. Reinvested you now have £104 and the following year you could expect 5% of £104 and so on. Hopefully you would get some capital growth on this also but that’s never guaranteed. This year the FTSE 100 has remained fairly flat.
@BobMc87 Жыл бұрын
@@TheCompoundingInvestor Thanks for the reply! I'm just building on my knowledge just now! Again great video and great channel. Very simple and easy to understand! 👍🏻👍🏻👍🏻
@lawrencer25 Жыл бұрын
I thought it was a percentage of the share price X the amount of shares you have ????and not your capital ..
@TheCompoundingInvestor Жыл бұрын
@lawrence parker True, I’m making a big assumption here that the share price doesn’t change as we don’t know if it will go up or down in the short to medium term. This was just to simply for the purposes of comparing with interest rates. At the end of the day it’s the total return which is the most important factor.
@lawrencer25 Жыл бұрын
@@TheCompoundingInvestor thanks for your message. I have been investing since I was 18 and iam now 43 . I too have a large portfolios in different things , from stocks and shares, cypto, properties, art , watches , just to name a few . Investing as always been a bit of fun for me . I pay a lot of money to HL & Charles Stanley ( my wealth managers) , which I dont mind . It's only the last 5 years I have played an active part . My wealth managers do they thing and I do mine . Totally separate. My accountants over see 's Everything. The yield is a percentage of the share , Times the amount and not the capital! It's wrong to give people wrong information. If your lucky , you can make money from the capital and the dividends. Unfortunately a lot of people dont understand dividends and the concept. Even the fact , that when companies payout dividends, they shares price goes down . Unfortunately you have to have £100's of thousands of pounds to make any real money in dividends. 20 odd years if you haven't got much of a capital. Wont even mention inflation . I remember when I started , Tessa , PEP and now ISA. Shouid be a very interesting few years for new investors. One thing we have in common, we got in early. I love work , regardless how much money I have , iam not retireing any time soon . Keep the good work up . I enjoy investing. To easy to sit back 🙊🙉🙈
@Morten. Жыл бұрын
Is this Stocks and shares ISA a UK thing? Tax free dividends sounds outlandish in my country. I live in Denmark and the ABOSLUTE minium amount of tax you can pay on stock/dividend gains is either 17% in a "stock savings account" which has some weird rules i dont really like. Or just a normal portfolio which is 27% up to the first 6700£ a year and then 42% anything above that. It makes dividend investing even more difficult and almost seems impossible
@TheCompoundingInvestor Жыл бұрын
Yes in the UK we can shelter £20,000 a year from tax, otherwise I’d have to pay almost 34% tax on dividends. Outside of the ISA you are allowed dividends of £2000 a year before paying tax.
@feralpanda5084 Жыл бұрын
haha love the McDonald's at the end 🤣
@TheCompoundingInvestor Жыл бұрын
Thanks Feral Panda, sometimes small rewards along the way can make all the difference in maintaining motivation. All the best on your journey
@AnonAnonAnon Жыл бұрын
I've tried Moneybox, put a hundred quid in a month ago, and ten quid a week. So far its +£4.89 in profit. I'm crap at maths, but I would assume that's a good interest rate/return for £140 invested?
@TheCompoundingInvestor Жыл бұрын
That sounds like a good return if it can be maintained. I wish you all the best and thanks for visiting the channel Anonanon
@Whiskah Жыл бұрын
So are you or were you at the start investing roughly £600 a month at the start? Just looking at the jump from 2010 to 2011, the fact it was over triple in daily returns, which based on a base math you went from a portfolio of 8.7k to over 27k in one year? Curious how you managed that otherwise even compounding it doesn't stack up
@TheCompoundingInvestor Жыл бұрын
Thanks for commenting Whiskah, and you may have just given me an idea for a future video. I should be able to find exact amount I put in each month from the very start. The figure did vary considerably from month to month however when I first started many of the companies stopped paying dividends or suddenly abolished them soon after because of the financial crisis fallout, hence the lack of dividends early on. I then started buying ones which did and also ones I already owned started paying again as the economy recovered. That could explain the sudden leap in returns.
@Whiskah Жыл бұрын
@The Compounding Investor aha awesome thanks look forward to it! Would definitely be interested (as someone who only just got started on the dividend bandwagon) to see a rough play by play/how much you invested roughly per month per year etc even just aim for as you say a cuppa to £1 to £10 whatnot
@josephrogers6459 Жыл бұрын
Why do you personally go for dividend over growth? Also, why do you decide to pick individual stocks instead of a dividend ETF? Great video by the way, I love your content, keep it up!
@TheCompoundingInvestor Жыл бұрын
Hi Joseph. Thanks so much for visiting the channel. Hopefully I’ll get some growth as well as dividends at the end of the day but it’s the passive income through dividends which motivates me to continue and I’m just as excited about the process now as I’ve always been because of the psychological nature of passive income flow. The ultimate goal would be to generate more passive income than my actual day job but I doubt I’ll actually achieve this. About ETFs, they were not mainstream when I started so I’m accustomed to buying individual UK stocks which I guess goes all the way back since I was a teenager and that’s all I could buy. More recently I’ve transitioned to ETFs and have been actively buying a FTSE 100 ETF (ISF). In recent week most of my investments have been in an S&P 500 tracking ETF (IUSA) but this is mainly because I’ve filled the Stocks and Shares ISA and so need to buy low div assets outside of the ISA so I don’t go above the £2000 limit. Sorry about the long reply but you did ask a couple of great questions.
@josephrogers6459 Жыл бұрын
@@TheCompoundingInvestor Thank you for the detailed reply! I personally invest in a S&P 500 ETF (VUSA) and a FTSE All world ETF (VWRL). But I’m definitely looking to build a dividend portfolio separate from this with the view to the same goal as you. Do you have a background in finance at all? You say you started young, curious as to where your interest began?
@TheCompoundingInvestor Жыл бұрын
Hi Joseph, I did a video a few weeks ago on paying my mortgage. In that video I explain my complete investing story if you are interested.
@josephrogers6459 Жыл бұрын
@@TheCompoundingInvestor Awesome, shall check it out
@rnf2203 8 ай бұрын
This is all very nice but aren't dividends ruined by large drops in percentage values of a business when they fluctuate by minus 5-10% as this means your investment amount will also drop by this percentage ?
@TheCompoundingInvestor 8 ай бұрын
Sure, share prices fluctuate in the short term but over the long term they tend to go up
@charliefreeman9836 Жыл бұрын
Is there any free trackers that allows you to see dividends over months or day periods. Thanks
@TheCompoundingInvestor Жыл бұрын
Thanks for watching and commenting Charlie. I don't know any myself but hopefully someone on here will point you in the right direction if there is one. Personally I just use excel to track all my dividends and I enter them one by one with the company and date. I can then easily see what my average dividend per day or month is over the last year. I find that half the fun of all this is recording my dividends in excel and watching the average month amount go up over time.
@charliefreeman9836 Жыл бұрын
@@TheCompoundingInvestor thank you. I will defo try the data in an excel spreadsheet. Love the videos. My alerts are always on. Happy investing
@davidjones4130 Жыл бұрын
I have worked it out to be 78p per day! Nothing from McDonalds yet , but maybe a can of coke or 2 tins of beans a day! If I ever lose my job and I keep my portfolio I will never starve!
@TheCompoundingInvestor Жыл бұрын
Excellent work and not too far away from the milestone of £1 a day.
@davidjones4130 Жыл бұрын
@@TheCompoundingInvestor very true and that is my internet bill & netflix!
@davegriff1593 11 ай бұрын
Good video, but i have about 6 cups a day.
@TheCompoundingInvestor 11 ай бұрын
Thanks Dave. I’m around that number of cups too 😁
@andrewsullivan1736 Жыл бұрын
My target is the pay for Netflix
@TheCompoundingInvestor Жыл бұрын
That's a great target to aim for. Onwards and upwards. Best of luck on your journey Andrew.
@angelkolarov1375 Жыл бұрын
How much roughly did you invest every single month? Thanks
@TheCompoundingInvestor Жыл бұрын
Initially I aimed for between £500 and £1000 a month but as the years have gone by I’ve added a bit more. The average over the course of 14 years is £1300 approx
@angelkolarov1375 Жыл бұрын
@@TheCompoundingInvestor wow that is alot of money considering the cost of living every month and rents. Congratulations awsome saving skills!
@sukhjotesingh9613 Жыл бұрын
How much did you invest to get £1k a month?
@TheCompoundingInvestor Жыл бұрын
Since 2009 I’ve invested 220k, currently yielding an average of £1140 per month
@sergiustanila736 Жыл бұрын
what tax on dividends is applied if we invest in British companies?
@TheCompoundingInvestor Жыл бұрын
Hello Sergiu, If you are outside of the UK then I'm afraid I don't know the answer to that. There may be a withholding tax but I'm not sure. Best check with your broker who may have more details
@catseyes8377 Жыл бұрын
@@TheCompoundingInvestor what about the uk? Are dividends tax free if under £4000?
@TheCompoundingInvestor Жыл бұрын
In the UK you are allowed to receive £2000 in dividends per year without the need to be taxed on them in a general investment account. In a Stocks and Shares ISA all your dividends are tax free
@Ferrari458-u8u Жыл бұрын
My goal is £3500 a month that would mean me and my wife could retire if we wished.
@TheCompoundingInvestor Жыл бұрын
That’s a great target to aim for. All the best on your journey.
@MattWhailing 3 ай бұрын
Same here all the best 😊
@stephenpalmer528 Жыл бұрын
Hi, Ive noticed you don't hold Legal & General in your portfolio. As a higher paying dividend company, why is this?
@TheCompoundingInvestor Жыл бұрын
Hi Stephen, that's a very good question. It's been on my shopping list for Ionger than I can remember but never managed to pull the trigger on it. I think there are a couple of reasons for this. Firstly I already hold two other big insurers, Aviva and Direct line and secondly I hold quite a large number of companies in the financial sector now so my appetite for another is not that big. However I do agree that Legal & General looks very attractive and I continue to monitor it closely.
@philiplythgoe7173 Жыл бұрын
Buy before XD then sell after, buy another comp before XD then sell it after... Don't hold on to anything....
@TheCompoundingInvestor Жыл бұрын
What generally happens is that on the XD date the share price will fall by the same amount as the value of the dividend so you will neither gain or lose anything in theory. On the XD date the dividend no longer belongs to the company so the value of the company is less than it was and the share price is automatically adjusted down to compensate.
@philiplythgoe7173 Жыл бұрын
Comps don't always fall on XD, might have to wait a while till they rebound, don't like holding shares for a year to get a 5% div. Little bits often is my method...
@philiplythgoe7173 Жыл бұрын
Heard you need £250000 to get a grand a month income, not if you chase divs IMO...
@hozonov Жыл бұрын
Thanks god i dont add milk to my tea so i can compound that extra 0.7p a day extra ✌️
@TheCompoundingInvestor Жыл бұрын
LOL! An immediate 23% cost saving
@russellpetrie119 Жыл бұрын
any good acc etfs?
@TheCompoundingInvestor Жыл бұрын
I’ve only got two distributing ETFs I’m afraid Russell, ishares FTSE 100 (ISF) and ishares S&P 500 ETF (IUSA)
@russellpetrie119 Жыл бұрын
@@TheCompoundingInvestor distributing means divedends get reinvested right?
@TheCompoundingInvestor Жыл бұрын
@@russellpetrie119 distributing pays out a dividend as cash while accumulating automatically reinvests back into the fund
@barrywhite5899 Жыл бұрын
£201 from National Grid today, just waiting for my BAT payment to arrive! Both on 17th august. Then I have 6 in September, BP. Direct Line M&g. Rio tinto sse and diversified energy. September will be a bumper month! Easily over 4 figures National Grid valued at £8100 and 703 shares…. I love this game
@TheCompoundingInvestor Жыл бұрын
I think you have caught the dividend bug, Barry. Impressive return from NG. September should be great month.
@barrywhite5899 Жыл бұрын
@@TheCompoundingInvestor £129 with BATs today…. £331 for August…
@TheCompoundingInvestor Жыл бұрын
Nice, your broker is obviously more efficient than mine. Can’t see a National Grid or BAT payment yet on my Barclays platform however I did get a dividend paid from United Utilities and Tate & Lyle earlier this month. Very motivating when those payments come in especially when you put them straight back to work generating even more dividends.
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