How To Invest $5000 (Investing $5000 In The Stock Market)

How To Invest 00 (Investing 00 In The Stock Market)

What if I had 00 to invest in the stock market? What if I was just starting out, all over again, and wanted to invest my first 00 in stocks? Today’s video discusses this very hypothetical question, from a dividend growth investing perspective. Learn how I would personally invest five thousand dollars for passive income and cash flow.

In particular, I would:
(1) Buy three stocks, with roughly equal investments in each. Focus on three sectors: consumer non-cyclical food and beverage, consumer non-cyclical household products, and healthcare (pharmaceutical, medical devices, and household products). I love these sectors for the long-term because everyone needs these items in both good and bad economies.
(2) Leverage dividend reinvestment plans (or DRIPs) for at least two of the three stocks. Open a low-cost brokerage account with dividend reinvestment for the third stock, if a no fee (or low fee) DRIP did not exist.
(3) Make lump sum investments, however stagger my investments one month at a time. It would take three total months to deploy my 00 in the stock market.
(4) Reinvest all dividends, compounding my passive income portfolio over time. (Eventually, I would not reinvest dividends and would live off the cash flow. In the short and medium-term, however, I would reinvest dividends to fuel portfolio growth.)
(5) Make periodic, ongoing investments. Since I would own three stocks, I would allocate capital to the one that has the most favorable valuation at the time of my purchase.
(6) Focus on blue chip stocks with international exposure (including India and Africa).
(7) Strive to purchase stocks with a long history of 7% year-over-year dividend growth.
(8) Focus on stocks with payout ratios in the 50% range.
(9) Focus on stocks with a starting yield in the 3% range (although anywhere from 2.0%-3.25% should do just fine).

Let’s assume for minute that I don’t care about capital appreciation and these three stocks go nowhere over the next 30 years. Let’s also assume I don’t reinvest dividends (although that is not true). From a conservative modeling standpoint, my yield on cost would be 23% after 30 years. Meaning: I would receive ,150 in dividend income each year for the rest of my life. That’s a nice stream of cash flow for my 00 initial investment. And, that’s a really conservative model (in my opinion).

Today’s video highlights the power and beauty of dividend growth investing. Starting with just 00 is a solid foundation and a great way to begin one’s dividend stock journey.

Please note that today’s video builds on my last video about investing your first 00:

If you’re researching stock brokers for dividend growth investing, you may want to check out this recent video:

Disclaimer: I’m not a licensed investment advisor, and today’s video is just for entertainment and fun. This video is NOT investment advice. Please talk to your licensed investment advisor before making any financial decisions.
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19 Antworten auf „How To Invest $5000 (Investing $5000 In The Stock Market)“

  1. Usually saw forex/stock trading as a side thing till I started making thousands of dollars from it, having an expert handle my account while I take care of my daily work has been the best part, forex has been a major source of income during the pandemic.

  2. I think it’s silly to invest $5,000 in dividends stocks. You’re not going to make money. The dividend payout are so shitty that it’s not worth risking your money with that company.

  3. It's hard to find the current day stocks that will eventually become the dividend kings/aristocrats.

    I need to find cheap stocks today that will become like KO, JNJ, Colgate-Palmolive, PG, MCD, etc.

    Can you imagine buying CocaCola at $3 per share?

     Because buying those right now isn't efficient.

  4. 6:30 ive asked this on other videos. I may need time to frame questions properly. market fluctuations and corrections matter?

    maybe dont answer, that if it takes more than a sentence.

  5. You are literally my life saver dude, i only found you yesterday by accident looking for some ideas on how to start my own dividend youtube and now ive watched roughly 30 or more of your videos within two days thx for all the advice

  6. Ian I was wondering if you would alter your strategy if using M1 Finance, which has no fees and allows you to buy fractions of shares? Would you still recommend avoiding diversification with limited initial capital?

    I've been researching dividend investing strategy like crazy the past few days and I gotta say, you have the most in-depth and helpful advice I've come across! It's clear you absolutely have a passion for this style of investing and were born to do it! Thanks for sharing so much awesome information with the community!!

  7. So glad I found this video……I literally know nothing about investing or stocks but my weekly paychecks got me thinking…….I bring home a little over $1000 a week and all I think about now is finding out ways to let this money make more money………….U MOST DEFINITELY HAVE A NEW SUBSCRIBER!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  8. Thank you Ian. I don't understand why with 1k you would pick 1, then with 5k you wouldn't pick 5 from different sectors? I put about $125 a week into my Roth IRA. I mostly let it sit looking for value. I have 12 stocks, and 5 ETF's. My wife currently is putting the same contribution in her account, but we use that for 50% utilities, and aristocrats that are different from mine. Thank you for posting.

  9. Hey Ian, how can you make a video in the future discussing specifically drips. More specifically how to invest in them and how to keep track of all the paper work. Investing through a broker is easier keeping track of all your investments and alot less paper work. I'm interested in drips but it seems very complicated to start. Keep up the great work

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