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SEB Money Alert - Get a head start on investing - free!
8 Highly recommended stocks to invest in: Dividend Payment Months
MSTY - Yield Max MSTR Option Income Strategy ETF Monthly
ARCC - Ares Capital 3, 6, 9, 12
MORT - Van Eck Mortgage REIT Income ETF 4, 7, 10, 12
ET - Entergy Transfer 2, 5, 8, 11
QDTE - Roundhill Innovation - 100 ODTE Covered Call Strategy ETF Weekly
SCHD - Schwab US Dividend Equity ETF 3, 6, 9, 12
CONY - Yield Max COIN Option Income Strategy ETF Monthly
VOO - Vanguard S&P 500 ETF 3, 6, 9, 12
DRIP – Dividends Re-Investment Plan
A DRIP is a plan whereas when a company pays out a dividend from an investment, that dividend amount is automatically re-invested into that company by buying more stocks.
Before you make it rain, make it DRIP and after you make it DRIP make it rain by transferring dividends into other stocks of higher dividend return, which will make it overflow – Be patient!
Some companies offer a 5% - 10% discount when purchasing their stock through the DRIP plan.
There are no transaction fees with the DRIP plan
Dividends that are re-invested through DRIP are taxed (federal) as W-2 income
DRIP is considered a long-term instrument to encourage accumulation of shares, not the growth of the stock price
A DRIP plan can be paused or cancelled so you can receive your dividend payments as regular income. The payments will be held in your Brokerage Account until you’re ready to transfer them to your Bank Account. Brokerage Accounts allow you to buy, sell, and trade stocks using a Desk Top Computer, Tablet or Mobile Phone. Apps:
Robinhood (2013) Webull (free Transfers) (2017) E-Trade (1996)
Moomoo (2018) TradeStation (1982) Fidelity Mobile App (2015)
Ninja Trader (2003) Sofi(2011) Kraken(Crypto Platform)
Please use my link to create your own Brokerage Account at: join.robinhood.com/sebastt559
Some of these trading platforms give you free stocks just for creating a new account
Some of these trading platforms offer additional financial products such as high-yield savings accounts
Most of these platforms are free and some offer additional services for a fee
Disclaimer: Sebastian Taylor is not a licensed financial advisor. The contents of this page is not financial advice. This is for educational and entertainment purposes only. Always consult with a licensed financial advisor before you invest. All investments have benefits and risks – know your risk tolerance before investing.
Become an Investor!
Join me on Robinhood. Use my referral link to create your Brokerage Account, deposit at least $10 and receive a free stock! join.robinhood.com/sebastt559
*Value of free stock may vary.
Stock Market: 10 Commonly Asks Questions
Is the Stock Market a type of gambling platform?
The Stock Market is not a gambling platform although some people place wages on whether the stock will increase or decrease within a specific time in the future. This is called Options Trading in its simplest definition. The full scope of it is much more technical than possible to explain in this article.
Who regulates and controls the Stock Market?
The Stock Market is regulated by the Securities and Exchange Commission (SEC) in the United States (New York Stock Exchange). This is the agency of the federal government that oversees the buying, selling and trading of securities and commodities. The SEC is the regulatory and legal authority over the Stock Market. The SEC promotes fair trading, presents (disclose) relevant company (or fund) data and monitors activity to prevent fraud. The SEC has the authority to add or remove companies from the Stock Market.
Is there a chance you can lose money in the Stock Market if a company goes out of business?
Yes, you can lose money if an individual company goes out of business. If a company is sold or merges with another company, you may retain your shares, but the value may decrease or in some cases the new company will pay you a full cash amount (one single payment). You may also receive shares of the new company in place of the shares from the old company. If a company goes bankrupt, all shares can be lost.
When buying stock, is that a loan made to a company or fund?
No. When you buy shares of a company you’re purchasing equity of that company. This does not make you part-owner of the company, but entitles you to a percentage of its earnings. The company pays you dividends (cash money) based on its earnings. A Corporate Bond is a loan to a company.
What do companies do with your money when you buy stock?
The companies use the money they to re-invest in the company (improve or create new products), place money in savings and pay you (shareholders) dividends. When the company grows it increases the price of the stocks and shareholders can sell the shares they bought (at a lower price) for the new higher priced share amount.
When you are ready to sell your shares, who buys them and if no one buys them what happens next?
When you sell your shares other people on the Stock Market buy them. If no individual buys your shares, hedge funds or other companies will buy them. Sometimes it may take a few additional days to sell the shares if an individual does not buy the shares.
Are your moneys FDIC insured in the Stock Market?
Brokerage Accounts connected to the Stock Market insure people up to $500,000 (in total assets) and up to $250,000 (on cash) which is provided by SIPC (Securities Investor Protection Corporation). Banks are required to insure deposited money with FDIC (Federal Deposit Insurance Corporation) insurance. Banks are not required to have money in reserve but insure up to $250,000 of deposited funds.
What happens to money when the Stock Market crashes?
The value of your shares decreases in the event of a Stock Market crash. Your dividend payments may be reduced, skip some payments or stop until the company(s) (or fund) become profitable again. You will not lose your shares during a Stock Market crash. Typically, when the economy recovers, stocks begin increasing in value and dividend payments resume on schedule (but may still be reduced until earnings increase over time).
Is day trading illegal? If not, are there limits to how many times a person can trade a stock?
Day Trading is not totally illegal; some brokerage companies restrict the volume of trading you can do in a day and/or add restrictions to your account to discourage it. Some brokerage companies set limits on how frequent you trade and may cancel (or freeze) your account if limit rules are violated. You must trade within set daytime hours and (in some cases) maintain a minimum of $25,000 in equity in your brokerage account.
Can a person buy, sell and trade Crypto Currencies on the Stock Market?
Yes, you may buy, sell and trade Crypto Currencies on the Stock Market if the Brokerage Account has that feature. There are some specific companies that are exclusive to Crypto Currencies which have more Crypto Currencies listed and offer more information about the Blockchain System.
Disclaimer:
These answers are purposely kept simple and does not go into any technical explanations of terms and conditions of specific brokerages, products or instruments. Conduct your own research for more detailed information on these subject matters.