Starting Dividend Investing For Beginners

I love watching investing videos on YouTube about dividend stock investing, but I’ve put off doing it myself for almost two years. But no more, because I’ve got a goal and taking action toward that goal is more important than fear. I’m starting dividend investing!

Why Start Dividend Stock Investing Now?

I’ve put off investing in dividend stocks for a long time because it’s not a main financial goal for us and I also felt overwhelmed by the concept of research “the best stocks”.

I didn’t want to dedicate lots of time to learning and analyzing stocks one by one, but I also knew that dividend stocks could provide a huge income once you have a portfolio of a certain size.

Because I’ve seen many videos about the power of dividend stocks when you reinvest the dividends, so I wanted to find a way where I could start small and invest without risking much.

I like easing in to things that are new to me as I learn about them and get more comfortable. Investing in single stocks is something that I’m not comfortable with since I’ve always been an index fund investor in my retirement accounts.

Because of that I’m dipping my toes into stock market investing with a specific goal – building a dividend portfolio that eventually helps provide for my daughter in the future.

Why Invest In Dividend Stocks?

So why invest in dividend stocks over other investments? Why not invest in something else?

I chose building a dividend stock portfolio for this purpose because I want to play with investing in single stocks that build a larger portfolio that provides dividends and growth.

Since I only invest in index funds in my regular retirement investments, I want to build an asset that provides either dividend income so I can later use that money for a monthly allowance or something I can sell to pay for my daughter’s education if the 529 plan isn’t enough.

Another reasons is simply because I needed to take action on something I’ve been interested in doing. I’ve literally been watching dividend investing videos for over a year and a half and talking myself out of doing anything with it. I’ve watched over a year of possible investing opportunities slip out of my hands.

I could easily tell myself its not the right time because the market is too high or I don’t have extra money for it, but I realized that if I keep doing this it will be another five years later and I still didn’t do anything. I could easily talk myself out of ever investing at all. Too much risk. Too much unknown. Too many other financial goals.

However, action towards a goal is always better than nothing. Even if it’s a small action, movement toward a goal is better than just thinking about doing something. We all know small consistent actions add up to success.

Also, I’ve realized that because the WHY behind everything I’m doing here on this channel and blog is FREEDOM, this is yet another way to eventually build freedom.

Dividend stock investing eventually leads to an income that is not tied to selling your hours of labor. That income not tied to a job means freedom and that will be amazing for me and for Penny and everyone else in our family.

Where To Invest In Dividend Stocks

Once I decided I wanted to finally jump in to investing in single dividend stocks and building a dividend portfolio I had to decide where I wanted to invest in dividend stocks.

I looked at several options but my Robinhood account I owned years ago – and ignored for literally 3 or 4 years – finally emailed me to say I was open to fractional shares and that made the decision for me: I’m building a dividend stock portfolio inside of Robinhood.

Fractional shares just means that instead of having to purchase a full stock at the full price – like a $750 investment in one share of Tesla, I could instead invest a smaller amount of money – even just $5 or $10 – and buy a fraction of a share. This ability to buy a fraction of shares opened up many most possibilities for a small beginning dividend stock investor.

This sounded perfect for how I planned to use the account, so I decided to go for it and buy my first dividend stock inside of my Robinhood portfolio. I realized I also am very comfortable with Robinhood because I watch dozens of investing YouTube channels that all use Robinhood and have portfolios there. 

How I’m Investing In Dividend Stocks

My plan for investing in dividend stocks in my “Penny Portfolio” is a little bit different than the normal way most people invest. I will be investing a small amount monthly, but I mostly plan to use this as another impulse spending tool. I plan to fund this account irregularly in a couple different ways.

First way I will invest in these dividend stocks, whenever I want to impulse buy something my daughter doesn’t need like cute clothes, I will instead invest in her account. She has enough clothes to last til she goes to kindergarten so I don’t need to buy them, I just want to. Instead I plan to buy a stock share with that money and continue to create an asset that will last for decades instead of a piece of clothing she will outgrow in a few months.

Second way I will invest in dividend stocks is whenever I sell something of hers that is currently not being used I will invest that amount of money. I have a pile of toys that need to be out of my house soon, so when I declutter I will contribute that amount earned into the Penny Portfolio.

The final way I will invest in dividend stocks in this portfolio, is to contribute $10 a month in our normal budget. As you guys know, I like having small amounts like this in our budget just as a reminder of our bigger goals. While it may not be a focus, those little amounts add up in the background as we are doing other things with the majority of our money. Plus, $10 isn’t much and doesn’t hurt out budget since we’ve cut so many regular expenses and focus on free fun activities!

Finally, you guys who watch my videos and read my blog will probably help build this portfolio of stocks. I’m going to be including my referral link in the description box for Robinhood. If you sign up, you will get 1 free stock and I will get 1 free stock as well. So if you use my link you will be contributing to the Penny Portfolio and we will all be building this up to provide an amazing future to the cutest kid I know.

Why I’m Talking About Dividend Stock Investing

I wanted to share this little dividend stock portfolio project I started in order to let you know why there was a $10 Robinhood line item in our budget for those who were curious.

February 2020 was the first month for this account and we currently have a balance of $23 all invested in Disney. We invested the money so far in fractional shares of Diseny because I’m going to invest in companies I know, understand, and use.

This is the perfect time for a reminder that I am not an expert at all and this is just me sharing my personal experience. This is not financial advice, this is just entertainment and me sharing my experience. My stock picks are personal and never a suggestion that you should pick the same. Do your own research!

So that’s it! I’m excited about complimenting my debt payoff and side hustle strategies with also building assets that will provide income. There are so many ways to achieve financial success and this is just another one of them. I’m dipping my toes in the dividend stock investing world and I couldn’t me more excited about it!

Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.

Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.

Her favorite investment platform is M1 Finance, where she built a custom portfolio for free with no fees. She shares her portfolio growth and savings progress every month on YouTube.