Beginner's Dividend Portfolio Building Masterclass - How To Build A $30K+ Dividend Paying Portfolio

So, are you over 35, 40 years old, and you're trying to figure out how you can build a portfolio that pays you consistent dividend income maybe on a quarterly or monthly basis, but of course, you're a complete beginner, and you have absolutely no idea where to begin. Well, in this beginner's dividend portfolio building masterclass, I do need to work on that name. This is going to answer that specific question. I'm going to share with you my personal six-step process on how to build a portfolio that can potentially generate around 30, 40, 50, or even $60,000 worth of dividends per year. Now, this is something that I've done for myself for my seven-figure portfolio, and what a lot of our community members, our students do in the paid accelerator program, our coaching program, what they also do for their portfolios as well. Now, remember, I just want to preface here by saying that this is not some sort of get-rich-quick scheme where you're going to invest just once, and then you're going to automatically get paid 30 or 40,000 dollars a year. This is going to require a little bit of capital, a little bit of discipline, and a little bit of time and patience. So, if this is something that you are willing to build right now and wait maybe a couple of years, maybe 5, 10, 15, 20 years or so, keep watching. This is going to be exactly for you. And if you don't know who I am, my name is Steve. I used to be a public school teacher, and I promise you, if I can simplify quadratic formulas and linear equations and standard deviation to a bunch of 11-year-olds, then I am almost certain that I can simplify stock market investing for 30, 40, 50-year-olds as well. Now, I know I say this in all of my videos. If you haven't done so already, I am going to be referring to my study guide that I built out for you. This is all linked down below in my $1 million investing roadmap. If you want to take notes, make a copy of this for yourself, then you can absolutely do that. Or if you just want to take screenshots of this video and refer back to it later on, that's totally okay, too, because I am going to share a lot of charts, a lot of numbers here, so you might want to take notes, or again, you can just download the study guide, so you don't have to take notes. All right, so, let's talk about the six-step process on how to build this portfolio. So, step one, of course, after you open up your brokerage accounts, specifically with your maybe your Roth IRA, traditional IRA, or your taxable brokerage accounts, the first step that you want to do is to choose your dividend assets. And generally, it really comes down to two different ones here. The first ones are with individual stocks, and the second are high dividend paying ETFs. So, if you are someone who says, "Okay, I want to gear towards these individual companies," then there are a lot of examples out there. One popular example is Verizon, or you know, Verizon Communications Incorporated, or the ticker symbol is VZ. Right now, the dividend yield is pretty high. It's around 6.70% at the time of this recording. Or, there is a very another popular stock, which is the Coca-Cola Company, ticker symbol is KO, and the dividend yield is currently around 2.52%. So, what does this whole dividend yield stand for? Well, essentially, whenever you see something that says 6.70%, it means that you get paid around $6.70 for every $100 invested for the year. Or, if you see something that's 2.52%, that means you get paid what? $2.52 for every $100 invested for the year. And of course, this dividend payouts is then going to be divvied up divided by four, because dividend payouts usually occur every quarter or so. And I'm going to show you the numbers and where you can find out these dividend payout dates, the ex-dividend dates, all of the good stuff in a little bit, so stay tuned. So, these are popular individual stocks, individual companies. But, if you are a beginner, then maybe this isn't something that you want to do. Maybe you want to diversify into a whole basket of stocks. So, instead of investing just in Coca-Cola, in Verizon, you want to invest in maybe 300, 500, 1,000, 3,000 companies all at once that all pay you some sort of dividends, right? So, there are a lot of high dividend paying ETFs. I made a lot of videos in the past that you can check out later on, but I would say the top three popular ones right now are SCHD, VYM, and SPYD. And I'm, you know, I listed all the out all the dividend yields here, but you can see that SCHD currently pays a dividend yield of around 3.25%. And again, that means that you get paid around $3.25 for every $100 invested. VYM is a little bit lower around 2.21% and SPYD is around 4.18%. Now, if you are going to choose a dividend paying ETF, I do like to go over this ETF selection criteria with everyone. Generally, before picking an ETF for yourself, you of course you want to make sure that you are comfortable investing in the specific ETF and that it fits your risk tolerance. Remember that none of this video here, the stuff that I talk about in this masterclass, is considered as financial advice. I'm just sharing some of the things that I do for my portfolio and what I do for our community members, like what they do for their portfolios as well. But generally, I like to check off five or six of these things here, okay? So, here's number one if you're taking notes. I like to check the one, five, and 10+ year trend and make sure that the charts are all upward trending. Remember, when we are investing as investors, we like to invest in assets, right? Things that appreciate over time, not depreciate over time. I know it sounds obvious, but I do meet a lot of beginner investors where they are chasing depreciating assets because they think it is cheaper, but we don't want to do that, right? I talked about this in a lot of my other videos. The second criteria is we want to check the one, five, and 10+ year performance and make sure that the average annual growth is around 7%. It can be a little bit higher or a little bit lower, but generally around 7%. It doesn't necessarily have to be around 20, 30, 40%. That's more for the tech and growth side, which I'll make another video on later on. But right now, for dividend income payers, this is what we generally want to aim for around that 7% average annual growth. And of course, the third criteria is we want to check for the dividend yield. So, to have a meaningful dividend payout, we generally want to look for a dividend payout, a dividend yield between 2 to 4%. Again, it could be a little bit higher, a little bit lower. These are just guidelines, not hard set rules. So, I know that there are a lot of dividend paying ETFs that pay around 4.2, 4.5%, and that's okay, too. But generally, if the dividend yield is above like 8, 9, 10, 12%, that is a little bit on the high-risk side because it just means that the asset itself, usually, not always, is depreciating over time, which I'll talk about in a little bit. And of course, if you have anything less than 2% or 1%, it just gives you like 0.1%, 0.2% dividend yield, then that's not a meaningful dividend payout, and that's not something that we want in our dividend portfolio. The fourth criteria is we want to check if the dividend yield history is increasing over time, right? So, it might pay 50 cents for every share this year, and then they might increase it to 52 cents, and then 54 cents, and then 55 cents, right? You want to make sure that the dividend payouts are also increasing over time. It just usually shows responsibility, maturity within the company or the ETF, so that, of course, it's going to incentivize you as a dividend investor to want to hold onto these assets in your portfolio. The fifth guideline is to check for the expense ratio. I made a lot of videos about this, where we want to make sure that the expense ratio is usually less than 0.50%. So, this just means that for every $100 invested, you are paying less than 50 cents per $100, okay? So, there are a lot of dividend paying ETFs that are around 0.03, 0.09, maybe even 0.15%, which again, I'll show you some examples in a little bit, so stay tuned. And then last but not least, this is very important, everyone. We want to make sure that the holdings, the companies within the fund are mature companies, that it is something that you are comfortable holding as an investor, okay? So, you're going to look at these companies and see, "Hey, do I like these companies? Do I believe in these companies?" If yes, then you can buy the ETFs. If not, then maybe you can move on to another ETF. Okay, so these are my six guidelines here. So, let's take a look at some examples. So, this is all the theoretical stuff, so let's actually apply it ourselves. So, I linked up two places that you can check these numbers. The first is Yahoo Finance, very popular. I use Yahoo Finance like pretty much every time I make a tutorial video like this. And the second website is stock analysis. Again, check it out yourself. You can do this on another laptop as you're watching this video. So, let's take a look at Yahoo Finance. And let's take a look at a dividend-paying ETF, SCHD. So, this is what I personally invest in. Doesn't mean that you should invest in it, too, because again, it's not financial advice, but just being transparent with you, I invest in SCHD, which is a ETF by Charles Schwab. And you can see the one-year chart. So, we're going to take a look at guideline number one. Make sure that the one, five, and 10-plus year trend are all upwards. So, if we take a look at the one-year chart, okay, it's going up, pretty good. Five-year chart, also very good, upward trending. And then all 10-plus years, yes, overall, it's upward trending. Great. We can then take a look at guideline number two. You can click on performance on the left-hand side, and then we're going to check the one-year, five-year, and then 10-year performance. Is this above the 7% average annual returns? Yes, it is. Last year, we had an anomaly where we had around a 28% return where, you know, a lot of investors were freaking out, so they fled to a lot of these dividend-paying assets here. That's why we did really well with SCHD. But of course, that was just one data point. We also want to look at the entire x-axis longer time horizon so we can get more accurate data. So, if we take a look at the last 5-year average annual return, it's around 8.65%, which is pretty good. And then over the last 10 years, it's around 12.87%, which is a little bit higher than the average annual return of just the S&P 500 as a whole, where we usually get around 10%. Okay? These are all numbers that you can Google or ask ChatGPT or ask Claude yourself. But, for SCHD, it's around 12-13%. Awesome. That fits criteria number two. Criteria number three, we want to check for the dividend yield, and we want to make sure that it's around 2-4%. So, where can we check this? Well, you can go to summary on the left, and under the chart, you can see the dividend yield right here. And what does that say? Well, it pays around 3.25%. So, that just means that for every $100 invested, you get paid $3.25 [music] for the entire year. Divide that by four, that's how much you get for your quarterly payouts. The next criteria is or the next guideline is to check the dividend yield history on stock analysis. So, let's take a look at I'm going to digress a little bit and take a look at an individual company like Coca-Cola. So, you can see with Coca-Cola, you take a look at the history. You can scroll all the way back down to 2021, and you can see that, oh, that's pretty interesting. One share paid around 42 cents for every quarter. And it was 42 cents here, and then they increased the dividend yield to 44 cents, and 44 all the way to 46 cents per share, and then to 48-49 cents per share, and then around 51-53 cents per share. So, is this increasing over time? Yes, it is, right? So, this is generally pretty good for my guidelines. If we take a look at SCHD, we can also see the same thing. These dividend yields or the dividend payouts are going to be a little bit on the fluctuating side. Why? Because with Coca-Cola, where it's a little bit more stable, you just see these two, three cent increments. For SCHD, it's multiple shares, multiple companies all in a basket of a stocks, right? And it's all in a basket. So, it's going to fluctuate since there's so many companies going up and down. So, we can see that back in 2021, one share was paying around 19, 20 cents per share. And then it went up to around 20, and then 17, 23, 21, 23 cents. But then if you take a look at, fast forward into the future, in 2025, it was paying around 24, 25 cents. And then currently, in 2026, it's around 25 cents, right? So, it has increased all the way back down from 20 cents where it was back in 2021. So, has this been increasing? Yes, it has. And this is very important, which I'll talk about in a little bit. Then, we want to take a look at guideline number five, checking the expense ratio. So, if we go back to Yahoo Finance, on the bottom right, it's going to show you the expense ratio. So, the expense ratio for SCHD is 0.06%, meaning that you pay 6 cents for every $100 invested. You're probably wondering, is that good or bad? Generally, this is good because like what I said, anything below 0.50% is cheap or it's low cost. Anything that is above, you're going to pay a lot of unnecessary fees. I've done a lot of math on this before where if you compound it, you could be potentially paying around 100, 200, 400,000 dollars of unnecessary fees depending on how long you are investing for, right? So, we want to make sure that we choose low cost funds now, so this way we don't have to end up paying all these fees later on. Hopefully this makes sense so far. If it is, maybe you can give me a thumbs up just to let me know. And the last thing that we want to look at are these guidelines here, checking the holdings. We want to make sure that the companies within the funds are things that we are comfortable investing in. So, for example, if you take a look at Yahoo Finance and if you click on holdings on the left side, you can see all of the companies within the fund SCHD. There is Qualcomm, there is Texas Instruments, there is United Health, there is of course there's Coca-Cola, right? There's Merck, Chevron, Verizon. Again, we saw that, you know, as an individual stock. So, if you like these companies here, then go for it. You can invest in SCHD, okay? So, these are basically the six guidelines that I usually will look at and also what a lot of my students, my community members will look at before they invest in an ETF. Hopefully, this makes sense. Now, the next step is, well, we want to then calculate future growth and dividend payouts. So, to do this, you can use any compound interest calculator out there. There's investor.gov, there's NerdWallet, or if you want to use the one on my sheet in my $1 million roadmap, that's also okay, too, right? You use whatever you like. But, if you were to say invest $500 a month, you have $500 monthly contributions, and we get that average annual return of 10%. I know SCHD was giving around 12-13%, but let's just lower our expectations and let's just say we get a 10% average annual return for the next, say, 30 years or so. Then, our future portfolio value is projected to become around $1.1 million. Somewhere around there, okay? I know past historical results don't predict future gains, but we're just using this on average. And you can take a look at the historical records yourself later on, too. But, usually the S&P 500, the Dow Jones Industrial Average, just all the stock market in general, usually gives around a 10% average annual return. If we break this down even more, you can see, well, what we actually contributed over the last 30 years would be around $180,000, and what we made back of free money due to the compound growth is around $950,000. And this money, if we were to put it all into a dividend-paying ETF, does not include the dividend payouts, okay? So, there's no dividend reinvestment, no drip or anything like that. If you don't know what drip is, don't worry, I'll talk about that in a little bit, so stay tuned. This is a whole masterclass here. Okay, so this is pretty good, right? We're This is what we do as an investor. We put in a little bit of money and we maybe 3x, 4x, 5x our returns later on. So, if you are someone who wants to invest for the next 30 years, awesome, great. So, you get that $1 million portfolio. I'm using nice and round numbers here just for educational purposes, but let's say that we have a dividend yield of 3%. I know SCHD was paying around 3.25. Some of the other ETFs pay 4%, some pay 2%, but let's just say 3%, okay, as a nice round number. This means that your average annual dividend payouts are going to be around $30,000 a year. So, you built a portfolio over the next 30 years, you are going to get paid around $30,000 a year if assuming that we're just invested in these dividend paying ETFs, okay? Just trying to keep the variables as simple as possible. That's pretty good, right? And I am not also talking about the asset appreciation itself because remember the portfolio value, the actual shares of the ETFs will also depreciate and you can sell them, but we're not even taking that into account. We're just only looking at the dividend payouts. Now, if you're someone who says, "Okay, well, what if I were to invest in a longer time horizon? Maybe for the next 40 years." Then that's okay, too, cuz I know some people they just want to invest a little bit and then maybe I just set that aside and then they invest in another brokerage account and that's what they use in the near-term future. But if you want to invest for not 30 years, but 40 years, well, your projected portfolio is going to be around $3 million and that's that's pretty big, right? Just for investing in another 10 years. And if we do that same 3% dividend yield and apply that, that means that your dividend payouts are going to be around $90,000 a year. Again, I know I sound like a broken record. This is not even accounting for the actual asset appreciation, okay? Which I'll talk about in a little bit. But you know, with dividend investing, one thing that I like to use as an analogy is with real estate because if you think about home prices, like I live in SoCal right now, of course homes are not that cheap here, but let's just say that you find a home and you want to buy the home, fix it up, and then you want to rent out the rooms, right? It's very similar where you might buy a home for $500,000 and the rent that you can collect every month is $1,500 a month. Pretty good, okay. Now, remember with real estate, stock market investing, any investing in general, we see the asset prices rise over time. So, even though your price, the price of the actual home is around $500,000, this could potentially increase to $2.5 million 40 years later. I know that sounds wild, but we've seen this happen in history with your home, my home, all of the homes around me in California, Texas, everywhere around the world. We see these home prices appreciate. And it's the same thing with the stock market, right? It naturally will increase in price. So, it is not going to be that surprising to see a $500,000 home now turn into a $2.5 million home later. And it's not just that, too, because the rental income that we usually collect per month, it might be $1,500 now, but later it's going to increase naturally to maybe $7.5 a month, right? So, you can see this as, again, very similar to dividend investing where you are buying the house or the shares, the ETFs, and then you're going to see appreciates in value over time. And on top of that, you're not just going to see your dividend or your asset just, you know, increase over time. You're also going to see your dividend payout increase over time. So, it might be paying you $1,000 a quarter or $2,000 a quarter, but later on it's going to increase to maybe $10,000, $20,000, $30,000 a quarter, okay? Depending on how much it is that you put into your portfolio. So, hopefully this makes sense, the analogy makes sense. If it does, maybe you can give me a thumbs up here. So, here is step number two. Step number two is to use dollar cost averaging. And a lot of people in the investing world, we used to we usually use the acronym DCA, okay? So, what is dollar cost averaging? It's broken down to three steps, okay? I used to be a public school teacher, I like to simplify things as much as possible here. So, here are the steps. Step one, you want to set up recurring deposits. If you don't know how to do that, don't worry. I have screenshots for you in a little bit. Okay, I'm going to walk you through it, so it stay tuned. So, you want to set up these recurring deposits. I already made a video in the past where we talked about how to calculate your freedom number, how much money you need to be investing, so you're not under investing, and of course, you're not over investing and you're not enjoying life now. But, you want to figure out your freedom number, and then work backwards to figure out how much money you should be investing on average approximately per month to reach your goal, your freedom number. So, let's just say that for this example, we're going to say it's around $800 a month, okay? So, you want to set that up, $800 a month. Awesome, okay? Then, with that money that you put in, you're going to make sure that you buy shares every month. Some of my community members, they will buy shares every 2 weeks. Like for me, I'll buy shares every two or three weeks or so, sometimes every month. But, you want to make sure that you set up a plan for yourself, so that you're not just putting money into your account, that you're actually using that money to buy assets, right? So, for some people, they might just keep it simple and they will buy 10 shares a month. For you, it might be different, it might be five shares a month or maybe 100 shares a month, right? Depending how much money that you have. step is to increase your contribution goal. So, I like to say this with building wealth, going to the gym, getting stronger physically, we don't just go to gym once and expect that we're going to get six-pack abs, right? We need to do this on a consistent basis. And it's the same thing with wealth building, we don't just do it once, we don't just invest once, we do it on a consistent basis. That's how we get better at building wealth, right? That's how we add more fuel to the fire. So, if you are starting off with a little bit of money, that's totally okay, there's no shame in that. Like, you're here, you're learning, so you should be very proud of yourself. So, you could be investing $80 a month now, but then later on, you can then increase it to $100 a month, and then $120 a month, and then $500 a month, and all the way up to $800 a month. That's basically what I did back when I was a public school teacher. I started off with $200 a month, and then I increased it to like $300, and then $400, and $500. So, you want to set a number that you are comfortable with yourself, and then slowly increase that, and then you can buy more shares, and that's going to really compound your portfolio over time, okay? So, how do we actually do this from a mechanical perspective? Well, I use Fidelity. I know a lot of you also use Fidelity, Schwab, Vanguard. Those are totally great brokerages, too, but I use Fidelity, so I screenshotted Fidelity. So, how do we do this mechanically? Well, when we go into Fidelity to the dashboard, the first thing you're going to do is click on this transfer button. So, go ahead and click on that. Great. Then, you're going to set up these recurring deposits. So, there's going to be two toggles, or there's going to be a toggle that goes from one-time to recurring. Choose the one that says recurring. And then, you're going to choose your frequency. It could be monthly or bi-weekly, whatever it is that you choose. For this example, let's just do monthly just to keep things simple. You can choose your start date, so today, or next week, or whatever it is. And then, you can type in the amount. So, I just typed in $500. So, this means that I'm going to be contributing $500 every month for, yeah, indefinitely. So, that's what you want to do, right? Because, again, building wealth is all about habits. Once you are done setting up your recurring deposits, then you're going to go back to the dashboard, and you're going to look for this little magnifying glass where it says quote. Then, you're going to type in your ticker symbol. So, in this example, let's just type in SCHD. And this is what you're going to see. You're going to see the price of the share, which is $32.24 per share at the time of this recording. And then, you're going to scroll down, and there's going to be this green button that says trade. Go ahead and click on that. Then, it's going to take you to this part right here, where you need to make sure that all of these fields are correct. It's very easy. I'm going to walk you through it right now. First, make sure that the symbol is SCHD, it's not something else. Your action is buy because you're actually buying shares. Your quantity, let's just say that's 10 shares that you want to purchase or I want to purchase. The order type, we can choose it to a market order. Let's not mess with limit or anything else. We're just keeping it easy and we're long-term investors, so we don't need to save on those 2 cents or 3 cents or anything like that. Day in force, we can say day and then for trade type, let's just say cash cuz we're using our cash. And then you can see the estimated value of how much we're going to spend today if we were to buy 10 shares. Of course, I'm going to spend around $322.40. Why? Because each share is $32.24. I'm buying 10 shares, so multiply by 10, that's going to be around $322.40. I can click on preview order and then submit, confirm. And that's it. Congratulations, you are now a dividend ETF shareholder, a dividend ETF investor. So, once you have that, that's amazing. So, now what you can do is you can take a look at stock analysis and see well, when is it that you are actually going to be paid, when do you actually need to hold on to the shares so that you can get paid, how much are you going to get paid? So, here it is. When you go to stock analysis and you type in your ticker symbol, so I'm going to go to say this one right here, SCHD, and I'm going to see four columns here, okay? There's the ex-dividend date, and basically the ex-dividend date tells you when you need to hold onto the shares before the date. So, if the ex-dividend date is June 24th, you need to buy SCHD before June 24th. So, June 23rd and before that, okay? So, this way you are able to get the dividend payout on whenever it says that you'll get the payout. So, if you just go all the way to the right here, it says the pay date, which is June 29th. That's when you're going to get paid. How much are you going to get paid? Well, you can look under the cash amounts, which is $0.25 around $0.25 a little bit more than that, right? So, again, if you want to get paid the next payouts on the next pay date, you need to make sure that you hold the shares before the ex-dividend date. And you can check everything here on the dividend history list. If you don't see your actual date, you can also use a little bit of, you know, deductive reasoning, inductive reasoning. If you take a look at the patterns for SCHD, you can see that okay, well, you know, the ex-dividend date is usually December 11th, 2024, and then in March, June, September, and then it's December, March, June, September. So, most likely, you know that the next ex-dividend date is going to be somewhere around September. And you can see that in the past it was September 24th, September 25th, or September 20th right here. So, if you want to be safe, you can choose to purchase the shares before around September 20th or so to get the next uh payouts on the next pay dates. Hopefully, this makes sense. You can give me a thumbs up if it does. So, that is how you actually do this. How to actually buy the ETF. So, here's step number three, and this is very important here. You want to then figure out where to redirect your investments. This is very important because once you have the dividend payout hit your account, you don't want it to just necessarily just sit there and do nothing. You need to direct your money, right? I talk about this in a lot of my reels. You want to direct your money, otherwise, your money will just magically disappear. Okay, maybe to an Uber Eats or something else, or it'll just sit there as cash in a low interest account, and that's something that you don't want. So, there are three options here. Option number one, you can either turn on this thing called DRIP, or the dividend reinvestment plan. And basically, what this is is that it'll allow you to auto invest back into the same stock or ETF. When you go into Fidelity, Schwab, or Vanguard, there will be a check mark that you can turn on. It's going to have you read a couple of things, and you're going to agree to it. And then, what's going to happen is every time you get $5, $10, $20, $30, or whatever it is, it's going to use that $30, and then reinvest it back into SCHD. Or if you have Coca-Cola, it'll reinvest it back into Coca-Cola. So, it'll automatically do it for you, so you don't have to lift a finger, okay? So, that's option number one. Option number two is you can do manual self-reinvestments. So, something that I do on occasion, some things that a lot of our community members will do is that once they get that dividend payouts from maybe a particular stock, they don't necessarily want to invest it back into the same individual stock, they might want to diversify and spread out the risk by investing it into an ETF. So, if you have Coca-Cola and you get that dividend payout, you get $100, great. You can then use that $100 instead of buying Coca-Cola again, you can then purchase another share of SCHD, or maybe SPYM, or maybe a tech or growth ETF like QQQM or VGT, okay? So, this is called manual self-reinvestments. And the last one is if you are in income-generating mode, and this is something for people who you want to live off of your dividend income, this is what a lot of our community members do, then you can do that, too. You can do this specifically, it's best to do it in a taxable brokerage account, which I'll talk about in a little bit, so stay tuned. So, this is where you fund your life. This is money that will hit your accounts, and you can just withdraw from that, okay? This is something that a lot of people do like Warren Buffett, he doesn't have an actual 9-5 job, he just lives off of his dividends, right? He's a big investor in Coca-Cola, Apple, right, all these other companies. So, this is something that you can also do, too. Of course, you're not going to be like Warren Buffett where he gets like millions of dollars of dividends or whatever it is that he gets, right? So, you might get a hum couple hundred or a couple thousand dollars, but right now, if you are saying, "Okay, I want to use this income to fund my lifestyle for vacations, presents, maybe you want to do something nice for your community," then this is something that you can do, too, okay? So, that's step number three, you want to redirect your investments. Here is step number four, this is so important, everyone, you need to be aware of these beginner mistakes because I made this myself, I see a lot of community members do it, too, and it's very, very dangerous here, okay? So, here it is. Number one, you don't want to just focus on the dividend yield. I know there are a lot of people on the internet, and even like people that I coach and the coaches we coach, too. We will work with individuals where they will focus only on dividend ETFs where they pay 8, 9, 10, 15%. However, they're not focused on the entire picture. Because when they look at the actual assets itself, it's losing value over time. So, for a really good example is something like I'm going to put Verizon on the hot seat right here. Here is Verizon. So, Verizon, you can see that or let me actually go to Yahoo Finance. I'm going to type in VZ as a ticker symbol, and you can see Verizon over the last year, uh you know, it's not been doing that great. It's been kind of trending horizontally. And I know if we take a look at the dividend yield, it's around what 6.65% which is pretty good, right? That's very, very high. But if you take a look at the chart, the one-year chart is not that great. The five-year chart, it's actually trending downwards. And if we take a look at that one-year chart, I mean, it's been around the same price ever since 1997, 1998, around $41, right? So, yes, you are getting paid that dividend yield of around 6, 6.5%, but I mean, the actual asset itself is not really growing. So, generally, for me at least, I like to invest in things that are appreciating in value and it has a high dividend payouts. You want to have both. Because what ends up happening is I know there are other stocks where they just go downwards, and that's something that you don't want to do. Because a lot of investors, they will invest in these high dividend paying ETFs, and their portfolio actually just goes down over time because the asset is really bad. An analogy to explain this is kind of like buying a home in a bad neighborhood where yes, you're able to find a cheap home and you're getting that monthly rental income, but what happens is the home itself, because it's in a bad neighborhood, the value of the home just doesn't even go anywhere. It actually depreciates over time. So, that's something that you don't want to happen, okay? You want to make sure that what? Asset appreciation is going up and the dividend income, the dividend payouts are also going up, just like what I showed you with looking at stock analysis and all of the one-year, and 10-plus year charts. The second mistake that I see a lot of investors make is that they pay too much in fees. There are a lot of dividend-paying ETFs out there that charge like 0.65 or maybe 0.8% expense ratios, and basically it eats away at their dividend yields. And the asset itself is not even appreciating. So, you need to make sure that generally it's below 0.50%. A lot of people pay upwards of It's really scary to 10, 20, 30 100,000 200,000 in unnecessary fees. So, please be aware of that. The other thing, the third thing that a lot of people make mistakes on is they are not aware of taxes. So, if you were to invest in a taxable brokerage account, that's very different compared to investing in something like a tax-sheltered account, like an IRA, like a Roth IRA. So, if we look at a taxable brokerage account, just like the name implies, taxable brokerage account, it is going to be taxed. Your dividends will be taxed because it's actual income. So, there are two different types of dividends. There's qualified and there's non-qualified ordinary dividends. So, for qualified dividends, they are taxed a little bit differently. So, this is going to mostly be with stocks, ETF dividends, like kind of like what we talked about. And if you are a dividend shareholder, then you are going to be taxed either 0%, 15%, or 20%, okay? So, that's pretty good, okay? Now, if you were to invest in non-qualified ordinary dividend assets, so this is going to include like REITs, like real estate, some foreign international stocks, a couple of like bond fund distributions, short-term holdings, that is going to be taxed at a higher rate, between 10 to 37%, same as your paycheck, okay? So, these are things that you generally want to be aware of. Of course, you always want to consult with your tax advisor and figure out, okay, well, what makes sense for me? Now, if you were to invest this all in a Roth IRA, you invest in SCHD, Coca-Cola, all of this is going to be tax-free at 59 and 1/2 when you pass that 5-year rule and you're starting to withdraw your money. So, this is where a lot of people like to invest because they want to retire at 59 and 1/2 and all of their money is going to be tax and penalty-free. Very, very powerful. That's That's why I always talk about Roth IRA so much on my channel, okay? So, things that you want to be aware of, okay? Taxable brokerage account and a Roth IRA. Is it okay to have both? Yes, absolutely. That's what I do, a lot of our community's members do, because there are pros and cons with a Roth IRA and taxable brokerage account. With a Roth IRA, there are contribution limits and income limits. I talked about that in several videos before, you can check those out later on, but with a taxable brokerage account, there are no contribution or income limits. So, you can invest as much as you want and take out as much as you want because there are no penalties as as well. So, things to think about, okay? You can do, of course, do a little bit of both. I don't like to have this this or that kind of mindset. You can do a little bit of both, that's fine. And the last thing is the last mistake I would say is there is capped upside growth. So, if you remember from my other videos, I always talk about how dividend-paying assets compared to growth assets. If you take a look at something like, here, I'll go to this website called tradingview.com, and if we were to compare something like SCHD and a high-growth ETF, then you're going to see a big difference here. So, when you go to tradingview.com, I'm going to type in the ticker symbol SCHD, go to the plus sign here, and you can type in the ticker symbol VGT, and then we can do a little comparison. You can see that VGT over the last uh you know, from this time frame that you see from 2022 all the way to 2026 or right now into the future present time, this is 116% growth for VGT, right? That's huge compared to SCHD where it only grew around 24%. So, if you invest in these dividend paying income ETFs, just know that you are going to generally cap your growth, okay? And that's not necessarily bad, it's just a different type of investing because there is also a benefit because if we take a look at say in 2022 when we had our bear market when the stock market was going down, you can see that well, the dividend paying assets actually did much better. So, here, let me zoom in a little bit more like this, and you can see that with SCHD which is the red and green line right here, uh it was actually not dropping as fast compared to VGT. VGT had around, if you take a look at the Y axis, the vertical axis, it dropped around 33 34%. But if you take a look at SCHD, it only dropped around what, 15% 16%? So, it's half of the drop compared to VGT. So, again, with anything in in investing, there's always tradeoffs, pros and cons. You just want to see what you are most comfortable with, okay? But just know that with dividend paying assets, generally they are slower in growth, and that's totally okay because with the slower growth, you get the dividend income compared to the tech and growth ETFs where you don't get that consistent income, okay? And the last thing that I would say that a lot of people don't even know about is that dividend payouts are pulled from the dividend assets itself. So, for example, if there is a stock, one share is $100, and let's just keep it simple. Let's say there is a $1 payout. Well, what generally happens is when that payout happens, you get that $1, your stock itself would generally drop to $99. It would drop $1 because that $1 came from the $100. So, your share price will generally drop a little bit to maybe around $99. That $1 of dividend payout that you get doesn't magically come out of thin air. It comes from the actual stock itself. Okay? If that makes sense. But again, remember, just because it drops for a day or it drops a couple of cents or a couple of dollars, whatever it is, if you take a look at that long-term horizon, you can see that okay, well, it still grows over time, right? Like we take a look at SCHD, we take a look at that all 5-year chart, that 1-year chart. Yes, there are going to be drops. It's very natural in the stock market, but generally, it still is upward trending. That's still pretty good. Okay? Now, here is step number five. Very important here, okay? I generally like to ask these four questions, four or five questions depending on, you know, what other questions you want to ask yourself. So, this is something you want to ask yourself tonight and maybe with your spouse, too, because generally, you want to invest with your with your partner, your husband, or your wife. Ask yourself these questions first. Do you have discipline and patience with investing each month if you want to build this dividend portfolio? If you're someone who wants to get this get-rich-quick scheme, you're like, "Oh, I'm going to put this money in and I'm going to start I'm going to become a millionaire next week, next month." That's uh that's that's false. And anyone who says that to you is lying to you, okay? With all dividend income, dividend portfolios, with passive income, it takes a little bit of time. It takes some capital, right? So, there are going to be some tradeoffs. But of course, if you are disciplined and patient enough to to build this right now, you plant the seeds, you water it, you give a lot of love and sunshine over the next 10, 15, 20 years or so, you're going to look back and really thank yourself right now. It's like taking care of our bodies, right? We're going to gym, we work out a little bit, we get a little bit stronger every day. We might get a little sick, we might get a little sore, but it's okay. In the future, in the next 10, 20, 30 years or so, we're going to look back and we're going to be very grateful that we took care of our bodies. Same thing here. The second question you want to ask is, are you comfortable with the tax implications that I just shared with you? If you are okay, you understand it, then you're like, okay, then I can invest in a little bit of Roth IRA and invest in a little bit into my taxable brokerage accounts. Third question is, do you like the stability in the asset prices? Okay? If that's what you want, then go for the dividend paying ETFs or stocks. If you don't like the stability, cuz some people they really like the volatility, they like that growth, then maybe you can gear towards that tech and growth side. Okay, which I'll make another video in the future. And then the fourth question is, are you okay with the consistent dividend payouts, right? Cuz you remember, the dividends are going to be taken out of the actual stock price, but if you really like the dividend payouts on a monthly, quarterly basis, you like getting paid a couple thousand dollars, which, you know, happens for my portfolio, for my a lot of our students' portfolios, then yeah, sure, go for it, okay? Just know that there are going to always be pros and cons, right? There are going to be trade-offs. Okay. So, maybe you can let me know in the comments. If you say yes to all of these, then yes, this is going to be for you. So, this really then brings me to step number six. I highly encourage you to use the $1 million investing roadmap. So, it has all of my study guides here because I really want you to have a little bit of homework for yourself and, you know, you and your spouse tonight. You want to use the calculator to calculate how much you actually need to invest. The biggest problem that I see with a lot of investors is they are not aware of this. So, what ends up happening is they under invest, and then what happens is, you know, they become one of these statistics here where most Americans are behind on retirement savings. And it's a really scary place to be where you find out later on that, oh, you can't leave your job, right? So, you want to make sure that you are actually investing the right amount so you can hit your goal. There is the other part where a lot of people are over investing where they are just penny-pinching every single dollar and they are just investing too much money and they can't enjoy life now. They won't go out for a nice meal. They won't take out their wife or their husband to a nice vacation and they were just very miserable like staying at home every single day and not doing anything fun or anything like that. So, you don't want to be in that position too where there are people that actually know that they have already like 5 million, 7 million, 10 million or they're projected to have a large portfolio later on, which isn't super necessary, but they were just sacrificing the enjoyment of life right now. So, you want to make sure that you use this calculator to calculate how much you actually need to invest. And all of that is within my $1 million investing road map right here, okay? And it is probably a very good idea for you to use the spreadsheets here because I actually spent many hours putting all of this together so you can kind of see, okay, like what are some ETFs, high dividend paying ETFs, and the actual details of each one so I can see which one best suits my portfolio and my risk tolerance. I made all of this here ETF comparisons overall, expense ratios if you want to try to save on your fees there. It's all right there. And if you're someone who has more than $50,000 uninvested, it's just cash sitting in a low interest bank account, you actually have the highest risk because of inflation. So, if you want to actually move your money, start growing it, you already have your emergency fund, you already paid off your credit card bills, your credit card high interest credit card debts, then I highly encourage you to sign up for the road map. And then when you say that you have more than $50,000 of uninvested cash, I'll invite you to my 5-day investing challenge where I know a lot of you are very scared with investing, you're very scared with knowing what to click on, what to do as your next step. I show you everything. I'll help you set up, automate, and diversify everything in under 5 days, as long as you put in the work, okay? So, you're going to get access to all my resources, my entire guides here, all of my resources, my sheets, my ebooks, all of my lessons, my just everything in general. You also get access to all my videos, all my quizzes. All of this is all free, okay? And if you still need help, you can also ask me questions within the private community. And uh yeah, it's just right here. It's like a little board right here. And you can also join my Thursday live chats that I'm hosting as of now. It could change in the future, but it's a very intimate group where it's just me and 10 other people. You can turn on your cameras, turn on your microphones, and ask me your questions, and I'll help guide you in the right direction. And even with all of this, and you still need help, it's okay. You can even jump on a strategy call with me or one of my team members if I'm too busy. And we'll build out a personalized plan for you, and maybe potentially invite you to our one-on-one coaching program if that's something that you want, okay? But this is for people who want to get accelerated really fast. They are tired of figuring out everything themselves, and they're just okay, like, okay, I need a coach. I need someone to help me, and so this way I can get all of my accounts set up as quickly as possible, okay? So, if any of this is interesting to you, you can download the $1 million investing roadmap down below. I really hope this video helps. Please let me know if you have any questions. I'm going to be on my computer for the next couple of days this week answering all of your questions for this video here. And yeah, hopefully this inspires you to start investing and build out your dividend-paying portfolio, and I will see you all in the next video. Bye, everyone.