There’s a lot to like about dividends. For starters, many dividend payers are also fast-growing stocks.
It’s a terrible mistake to ignore dividends when you’re investing, as they can be powerful aids in growing your portfolio while you’re still working, and they can serve you particularly well in retirement, too. But don’t think of dividend-paying stocks as only appropriate for older investors.
Here’s a look at five key reasons you should consider adding some (or many) dividend-paying stocks to your portfolio.
1. Dividends generate income
The first reason is perhaps the most obvious one: Dividend-paying stocks generate income. As an example, if you have a portfolio worth $400,000 with an average dividend yield of 3%, you’re positioned to receive $12,000 each year, just from dividends. That money can be reinvested in additional shares of stock, to plump up