Friday, January 15, 2010

Extra Money from Stock Dividends

The last year has been personally the most difficult financially we've ever had.  Between laid off from my job last January (and only a few contract jobs since), a fire in a rental property, a new furnace, and higher than usual medical costs, we are rapidly burning through our savings.  Unfortunately, despite post-graduate education and many years of work experience, I've been unable to land a position.  I'm overqualified for the basic ones - employers know I'll cut and run if something better comes along - and I'm not specialized enough for what the market demands right now.

What to do?  My wife doesn't make much, I just lost my health insurance, my unemployment will run out shortly, and we've cut all fat from our budget.  We basically live on macaroni and cheese with tuna.  We are considering selling one of the two rental units - that would at least give us a little breathing room - but dislocate one of our daughters and cause family friction.

I've got some small investments outside of IRAs (don't want to touch those) and have decided they can provide some income by either selling for cash or by reallocating from growth to income.  As a quasi-knowledgeable investor, I feel comfortable in researching and doing this.  One of my better sources for information is The Motley Fool's web site.  Do a little poking around there and you'll find a list of the S&P 500 highest 50 dividend stocks.  Many are common recognizable names that pay regular dividends to their shareholders.  Open up an account at a low-cost broker such as Sharebuilder, buy some stock, and have some extra income, via dividends, flowing in.

A word of caution to all: DO YOUR HOMEWORK FIRST BEFORE INVESTING.  I am NOT a registered financial planner, broker or claim to be so.  Investing involves a certain level of risk, as 2008 clearly demonstrated.  But these are difficult times and investing and dividends can be a viable option.  Also, dividend income typically means taxes too, so consulting your accountant is encouraged.

Luck to all in 2010, may all our ships come in to port!

- AJ 

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