Robinhood App Dividend Paying Stocks vs. Long Term Growth!

what’s up ladies and gents welcome back to the good old tech crack house here I hope you’re all having a great great day today I’m actually going to be talking about something regarding dividends versus not dividends basically the advantages of using dividend paying stocks that pay monthly and etc etc versus using. You know. long term growth stocks we’re not even long-term necessarily. But even short-term and I’m going to try to I try to discuss which one is better. So I hope that you like this content if you do please feel free to leave a like share and subscribe and I’m going to go ahead and get right into it so basically I seem to meet two camps of people with. You know. kind of actually collecting significant interest and even payments on stocks and you have people that really like dividend payments. You know. especially frequent monthly. You know. high percentage yield dividend payments and then you have people that pretty much only like growth stocks there is some in between I think the dividends are great. I think that they can be kind of burden burdensome for some reason for certain reasons. I mean and a big reason why it’s not always a good idea to go for dividends only. Now I’m not saying that you can’t do both you can’t go for dividends and long-term growth. But with dividends you do actually have to pay taxes on them for every dividend you receive and there are some funds that are actually exempt from taxes which is pretty cool. But if you’re receiving. You know. a dividend payout of 20% a year you have to pay taxes on all that money that you’ve made which can really add up. You know. especially if you’re collecting significant amounts of dividends and a really interesting thing about dividends actually is they basically act as income. So you have to pay income tax on them with long term investment it’s pretty much always capital gain taxes that you pay. Yeah, basically when you when you collect a dividend you have to pay tax on it and it counts as income. So you have to pay within your tax bracket basically. So if you’re in a fifteen percent or twenty five percent tax bracket you actually have to pay fifteen or twenty five percent on the dividends that you collect another risk is actually collecting income from dividends could push you into another tax bracket basically so say for example you’re in the twenty five percent tax bracket it could push you up into the twenty eight percent which is kind of a big jump. But at the same time it is something that I think could be avoided outright if you just did long term investment. Now dividends can be useful especially if they’re paid out monthly. Because you can really speed up compounding interest with that that kind of payout especially if you reinvested each month when you receive the dividends which is actually a tactic which is pretty well known I think is. You know. compound interest applied rapidly I guess is it’s what I would call it. But once again even if you are immediately investing dividends reinvesting dividends that you collect you do have to pay tax on whatever you earned. So it can be a good way to kind of waste money I guess I do fully support it. I think that it’s still a good method I just think that sometimes people forget that they have to pay tax on certain things and dividends are definitely one of them. So, you know. if you don’t want to pay any more taxes than you already do dividends might be a good idea to avoid long term investment it’s interesting. Because it doesn’t really put as much cash in your pocket per se. Because. You know. if you’re collecting a lot dividends then you can actually directly withdraw them from your account and kind of have them and spend them or save them and do whatever you want with the cash that you’ve collected with long-term growth you can’t really do that which I guess shouldn’t come as any surprise. But you don’t really get any money back until you actually sell the investment which isn’t necessarily a bad thing and. I think that it encourages waiting another good thing about long-term investment is um capital gains stock is actually a capital gains tax rate pardon me is actually what you pay on what you earn so it’s not really income necessarily. So if you wait different lengths of times you can avoid paying as much on your long term taxes say if you wait for a year after owning a stock you’ll actually pay a reduced percentage on your taxes for that sale and for your capital gain. So this is kind of something that you have to consider taxes are a lot different with dividends like I said you have to pay income tax with long term investment you pay capital gains tax and you don’t you can kind of get breaks if you hold stock for a certain length of time so definitely two options to consider of course I would suggest finding kind of a blend. You know. that happy medium I wouldn’t necessarily go all or nothing. You know. a lot of people really like to focus on dividend stocks and I think that’s fine. But just be careful. You know. definitely put some put some good growth and stability in there too. Because dividend stocks um they’re different they act differently. So. It really depends on what you’re going for. But. I think that I just kind of want to discuss that really quick and just kind of share my opinion on. You know. dividends versus long-term growth and why they’re kind of different and. You know. why they’re beneficial or not beneficial in certain ways. So I hope that you liked the article if you did feel free to like share and subscribe and consider checking out my patreon page I really appreciate it if any of you do and that’s going to do it from you today ladies and gents so have a fantastic day and adios.

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