Why Waste Your Time on Gold When You Can Invest in Dividend Stocks?

You may not have noticed it, given how much we’ve focused on gold this week, but there is actually more to investing than just gold.

In fact, if we’re honest, gold investing should be the least labour intensive of all investments.

You know gold is money. You know gold is a long-term protection against central bank and political meddling…so just buy it at various prices and times throughout the year. It’s a no brainer.

In our view, if you spend more than 10 minutes a week deciding whether to buy or sell physical gold, you’re wasting your time.

When it comes to investing, there are more important things to focus on. Such as, finding ways to get on what we call the ‘Secret Payroll’…

Get Your Name on the ‘Secret Payroll’

So, just what is the ‘Secret Payroll?

This is how we like to refer to dividend stocks. We call it a ‘Secret Payroll’ because in a way, as an investor in a dividend-paying company, it’s like being on the company’s payroll…only better.

Unlike regular employees, you don’t have to turn up at 9am, put in a full day of work, and only get to go home at 5pm. Instead, you get paid for doing nothing…no work…you don’t have to lift a finger and the ‘paycheques’ will still roll in.

In fact, the only thing you need to do to get on the ‘payroll’ is to do some homework (analysis) at the beginning. We guess it’s a bit like a job interview, except you’re interviewing the company.

This is where you need to take time with your analysis.

Unlike gold, where one gold bar is pretty much the same as another, when you’re dealing with stocks, well, no two stocks are the same. Even if they have the same dividend yield, it doesn’t mean they have the same growth prospects or earnings stability.

Putting in the research at the beginning is a vital part of all stock investing, especially dividend investing. When you buy a dividend stock you hope to own it for years…perhaps for life.

Ideally you don’t want to buy and sell dividend stocks. To take our ‘payroll’ analogy further, it would be like changing jobs all the time. What you’d prefer is to stay with one company, sit back and earn a completely passive and stress-free income.

If you can put in the effort at the start, it’s entirely possible to reach that goal. And if you stick with it, after a few years you should have your name on the ‘Secret Payroll’ of a handful of stocks. Each of them sending you two ‘paycheques’ each year.

A Few Hand-Picked Dividend Stocks

This is why it’s important to keep your investments in perspective. (Heck, it’s important we do that at Money Morning too.)

Gold is a great long-term investment. It’s a great way to protect your wealth from the money manipulators. But from a wealth building outlook it’s not as important as picking the right stocks.

That’s why although you should buy and own gold, you shouldn’t allow it to take up all your time, or all your money.

Instead, use your time to find the best dividend stock on the market and invest in it. Then find another, and another, until you’ve got maybe five, six or seven solid dividend payers in your portfolio.

From there the key is to add to your holdings of each stock on a regular basis. Simply put, you don’t need to own a portfolio of 50 stocks, each paying a dividend. All you need from an income perspective is to own the best stocks — that’s where doing the research comes in.

So, whether you’re starting out or rebooting your portfolio, think about how you’re spending your time. Buy the gold and be done with it. Next comes the important bit — picking stocks.

If you get that right, you’ll find that you’ve built a robust portfolio of qualify income stocks that will pay you a sustainable and comfortable income for years to come.

Cheers,
Kris

Join me on Google+

Ed Note: There’s a simple way to compound your gains without increasing your risk. How? In today’s Money Morning Premium Kris shows you how to turn a ‘safe’ income stock into a growth stock. It’s not magic, but there is a trick to it…click here to upgrade now.

From the Port Phillip Publishing Library

Special Report: TORRENT SIGNAL 3

Markets and Money: The Brains of Barbarians       

Money Morning: A Trader’s Eye View of Gold’s Frightening Collapse

Pursuit of Happiness: The Definition of a Stockbroker…

Australian Small-Cap Investigator:
How to Make Money From Small-Cap Stocks


Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read. Money Morning Australia is published by Port Phillip Publishing, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.


Leave a Reply

Your email address will not be published. Required fields are marked *

Money Morning Australia