Name: Passive Income - The EASIEST Way To Make $1000 A Month
Uploaded: 2020-10-08T21:30:30.000Z
Duration: 10 min 32 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

How much stocks do you need to buy to make 1K a month

When you think of the stock market, the first thing that comes into mind is this complicated

With so many confusing charts, its easy to get lost.

But what everyone knows for sure is that you can buy stocks and sell them whenever their

rise but there is another way that professional investors use to make a fortune.

In 2018, warren Buffett received 3.8 billion dollars in cash from his 5 major investments.

Don't get me wrong, he didn't sell his shares to earn that much.

bUt instead, these 5 companies earned a ton of money during the year.

Since warren buffet is an investor in these companies, they had to share their profits

Simply put it, there are two types of companies in the stock market, companies that have already

matured and have profitable and sustainable business models so whenever they make a profit,

they don't know what to do with that money, therefore they end up sending it to their

shareholders, on the other side you have companies who are still trying to turn a profit like

They might report a profit, but the company needs that money to grow further, so here

is a question we will try to answer in this video, how many stocks you have to buy or

how much you have to invest in the stock market so that you receive a thousand dollars from

your investments every month without selling your stocks?

But before we do that, we have to understand a few key concepts.

And how to avoid the dividend trap that might lead you to lose your entire investment?

Dividends - The Real Passive Income Since the dot com bubble, the nature of investing

Before that, investors' main concern was to invest in companies that would turn a profit

and share these profits with them since, as shareholders, they are entitled to the company's

But entrepreneurs such as Jeff Bezos stepped in and completely changed the game.

The goal was no longer to maximize profits but rather to grow the company even if that

means not paying a dime in dividends to shareholders.

A company that only burns cash and isn't profitable looks like a bad business, but the strategy

is to keep operating at a loss until you dominate the entire industry and then generate profit

since you will be the only player in the market.

And that's what Amazon did for the last 25 years.

Despite its 1.6 trillion dollar valuation, it never paid a dime in dividends to its shareholders.

In fact, it avoided taxes for 2 decades since it was reporting a loss.

In 2019, it turned 11.5 billion dollars in net income while its competitor Walmart generated

15.2 billion dollars and paid 2.16 dollars in dividends per share, but at the end of

the day, Walmart was valued at 1/3 of an amazon.

Amazon might seem like a more promising stock in the future, but if you want passive income,

And the stock market is filled with such examples.

There are just a handful of tech companies that pay dividends.

The rest, especially the big ones, would rather re-invest what they earn instead of paying

High Dividends -The Perfect Scam To Attract Investors

While stocks that pay high dividends are extremely seductive, they aren't always the best choice.

In fact, dividends sometimes are used to mislead investors and rip them off.

The company might be on the verge of bankruptcy, or it might be barely surviving.

Its stock is falling year after year, so one way to make it's stock attractive to investors

If you take a look at its dividend rate, you will see a ratio of 7.16 percent.

You probably won't find anything like that in the entire market.

Even the world's largest company, apple, pays around 2 percent in dividends.

But I personally would not buy this stock and wouldn't advise anyone else to do that.

The stock price was around 50 dollars 5 years ago, and you might imagine that it might have

grown slightly since then at least, but it didn't, the price fell to 43 dollars, and

the company does seem to have a future, so it pays high dividends to keep its stock attractive

to investors because who knows where else the stock price might be a few years from

Compare that to apple that pays only 2 percent in dividends but the stock price rose by 337

Cashflow is great, but losing your principle is bad.

And the stock market is filled with such stocks.

So, don't choose to buy a stock solely because it has the highest dividend yield.

You might be wondering by now that are there any good companies that are both growing and

Take Coca Cola, for example, the company exists since 1886, and it began paying dividend before

you probably were born, it has quite a good dividend rate of 3.2 percent.

Of course, the stock price hasn't been growing as some of the tech companies because many

believe that there aren't much left for coca-cola to grow, but it is definitely not going to

They have been paying a dividend yield of 2.5 percent consistently.

The stock price doubled in the last 5 years.

Johnson & Johnson has been around since 1886 and is regarded as the king of dividends.

It's a big name in the pharmaceutical industry.

It also plays a key role in developing the vaccine for the current pandemic.

Its stock price might just boom once the vaccine is ready.

The companies that don't usually pay dividends are tech companies since the idea behind it

is that, the company would be far better if it re-invests that money back and grows faster.

Companies such as Google, Facebook, and Tesla don't pay a dime in dividends, which is why

It's a tech company that both excels in hardware and software.

It has a built-in ecosystem that provides it with consistent cash flow.

Its stock price rises as much as other tech companies, but it also pays a dividend yield

How Much do you need to invest to make a thousand dollars a month?

Well, since dividend yields are different from one stock to another and we don't want