Investing in dividend-paying stocks is a time-tested way to create passive income. The difficulty for many people is how to choose and create a portfolio of these stocks. I found Dividend Investing: The Truth about Dividends and Long Term Income Investing by Derrick Murray to be a good guide to creating a dividend portfolio.
The book is very straightforward. It quickly and easily moves through the steps to take to choose a selection of dividend-paying stocks to research. The author lists the main criteria to consider when picking a stock. Among these criteria are a dividendís yield, payout ratio, history of dividend payments, and the stockís price to earnings ratio.
The author makes a good point to know something about the companies you are choosing for your portfolio. You want to understand what the company does or produces. Otherwise, you will have a harder time determining if the stock is profitable.
Companies you are familiar with give you the opportunity to observe firsthand how the company is doing. For example, choosing a retailer that you frequently shop allows you to observe how others are buying. This observation can clue you into how the company is doing. A busy retailer would likely indicate a profitable stock.
The author suggests sources for finding dividend stocks and includes websites that have already researched the main criteria for each stock. In addition, there is information on how to maintain your portfolio and criteria for when to sell.
One of the things I really like about this book is that the ample information is presented in a quick, concise way. You can be picking stocks and selecting the best ones as soon as you finish the book. Nothing is complicated.
I do think it would have been good for the author to have included a little more explanation regarding the dividend yield. It would be helpful to know why a high dividend yield could indicate a troubled stock. Plus, a little more in depth explanation of what each of the criteria indicate would be helpful for investors new to stock picking.
The EBook is twenty-seven pages so it is a quick but concise read. For the small price, it has a lot of factual information. The layout is sensible and the book flows well.
In my opinion, this book would be a great read for those starting out in dividend investing. It offers enough advice to start a portfolio without being overwhelming. Too often investing books are heavy on information, but short on practical steps to put a portfolio in place. This book provides those practical steps.
I purchased this book for my own personal interests. I liked it so much that I decided to do this review.
This book is available from Amazon.com.
Dividend Investing - The Truth About Dividends and Long Term Income Investing
May I recommend my ebook, Investing $10K in 2013