Building a Dividend Stock Portfolio for Passive Income on Robinhood

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passive income it's the holy grail for
so many investors dividend investing for passive income
is one of the best ways to truly create actual
passive income in this video i'll show you how to pick stocks
and i'll also start creating a passive income dividend portfolio on robinhood
that i'm gonna take from zero dollars to a hundred thousand dollars
and i'll need your help how's it going everybody welcome back to
the channel if it's your first time here my name is jay and on this channel i
give you the tools the tips and the tactics
that you need to get the most out of your money and like i said before the
intro sequence in this video we're going to be starting
a passive income dividend portfolio on robinhood
that we're going to take from zero dollars to 100,000.


Now losing my job earlier this summer really drove home the importance
to me of starting to create multiple streams of income so in the
event that it happens again it won't be as big of a deal because
i'll have other forms of income to fall back
on so creating some passive income with dividend investing is a great way to get
started on that now i know a lot of other youtubers have
done stuff like this i think i saw it first on ryan
scribner's channel but i think in his video he actually
mentions that he saw on someone else's channel first
so there's really no original ideas anymore
but i think it's a fun idea something i want to get started on
so i'm going to say shout out to ryan i saw your videos link to his channel is
in the description below if you haven't checked him out before
so now let's get into how this is gonna work the account i'll be using for this
is the robinhood account i opened when i did my robinhood review
video which you can check out up here and if you want to sign up for robinhood
the link is in the description you get a free stock just for signing up and
linking your bank account so you might as well go do that now the
first rule for this hundred thousand dollar
dividend stock passive income portfolio i'm going to build here
is that i am not going to buy any stocks that i already own elsewhere
now in a recent video i took you through my dividend stock roth ira
and there's about 14 stocks in there so none of those stocks are going to be
eligible for this project if the time comes where i feel that any
of those stocks are worth buying more shares of i'll just do it in that roth
ira account where i already hold the stocks
this just keeps things simpler for me and i don't have to worry about having
different stocks in three different accounts so how are
we gonna fund this account where's the money gonna come from
well to kick things off i put a thousand dollars of my own money into the into my
robinhood account to get things started from there on i've set up a recurring
transfer into robinhood from my bank account of a hundred dollars a week
i've also recently set up a patreon account for my channel
and if anyone is feeling so generous you can go over there become a patron
support the work i do here and any of the money that comes from that will come
directly into this portfolio now one of the levels over there on
patreon will have the added bonus of you'll get some interaction on how
this portfolio is invested i'll put up regular polls over there for
patrons of that level where you will get to choose which stock
i invest in that week or that month i haven't decided how often i'm going to
do that yet so if you're interested in becoming a
part of this you can do that you can head over there and check that out i'd
be grateful for any and all support now the third way that money will find
its way into this account is if this youtube channel ever makes
any ad revenue we're a little ways off from that right
now so if you want to help me get there now's a good time to remember to
subscribe to the channel and share my videos with your friends
okay so now the strategy how are we going to pick stocks for this account
now i'm going to follow a dividend growth investing strategy
as i feel that's the best way to create passive income from dividend investing
all right now let's get into it how to pick stocks
how exactly are we gonna find the stocks that we're gonna buy in this account and
what criteria am i going to use now i just mentioned that it's going to
be a dividend growth portfolio so obviously the first metric we're
going to look at is a company's history of dividend growth
now i want to see at least 10 years of consistent
dividend increases from a stock so 10 years is the minimum i want to see for
dividend payments and consecutive increases but obviously
we're going to give preference to those long-term dividend stocks that are on
the dividend aristocrats and dividend kings list
so that there'll be 25 years and 50 years of consecutive payouts and
increases the second thing we're going to look at
when evaluating a stock is its pe ratio that's the stock's
price compared to its most recent earnings
and it's a good quick way to kind of determine
if a stock is trading at a good value or not
so ideally i'd like to see a pe ratio of 20 or less
but i'm gonna set the bar at a pe ratio of 25 or less
and because the market has been so hot lately i'm going to be a little flexible
on this because it might be really hard to find stocks that
meet this threshold the next number we're going to look at
when we're looking at how to pick a stock
is the dividend payout ratio now the dividend payout ratio tells us
roughly what percentage of a company's earning they're paying out as a dividend
the lower this number the safer that dividend would be
and the more chance they'll be able to increase it in the future
when the dividend paid when the dividend payout ratio starts getting really high
up near 100 percent or in some cases above 100 percent
that's a sign that the dividend may be in trouble and that'd be a red flag to
us when we're looking to enter a stock position
so when we're looking for dividend stocks for this passive income portfolio
we're going to set the dividend payout ratio at a maximum
of about 55 to 60 percent now dividend yield is another important
number that a lot of dividend investors look at
and if you remember my video on the number one mistake new dividend
investors make it's that they get too carried away
looking at the dividend yield so for this dividend investing passive
income portfolio i'm not going to have a set dividend
yield that a stock has to make now that's because one of my favorite
dividend stocks is visa which has an extremely low dividend
yield but the prospects for share price growth
and their dividend growth rate more than makes up for their low current yield
now on the flip side of this would be a company like verizon
that pays out a pretty hefty dividend yield
but the prospects for share price growth and the amount of dividend growth
are a little lower one number i will be looking at though
is the dividend growth rate now i want to see a dividend growth rate of about
two percent just so i can be sure that the rate of
increases of these dividends is kind of keeping pace with inflation
which in recent history has fallen around the two percent mark
now last but certainly not least i want to see
a trend of earnings growth so i'll look at the last
5 to 10 years of a company's earnings and
ideally i'd like to see a nice steady pattern of earnings growth over that
time that's usually a reliable indicator of a
steady healthy growing company if you see a declining earnings trend
that means there might be some major problems in that company's business
or if you see a company's earnings wildly swinging up and down from quarter
to quarter or year to year you're definitely going to have to do a
lot more research into what's causing those swings
before you feel comfortable investing in that company now i do want to say
these are only guidelines i'm willing to compromise on one or more of these
factors if i feel strongly enough about the
stock overall so these aren't hard and fast rules they're just guidelines
that'll help me narrow down that entire list of stocks that's out there
into a shorter list for further research another important thing to note is this
isn't going to be a trading account i'm not going to be constantly buying
and selling stocks or buying and selling shares
i'm going to try to buy and hold stocks within this account
and just collect the dividends and watch the dividends they pay out continue to
grow and get reinvested into more shares like
i said that's dividend growth investing and i feel that's the best way to create
passive income from dividend stocks the only times you'll see me selling
shares of my dividend stocks are under two circumstances number one
obviously if the company cuts or stops paying a dividend
in that case that stock no longer really fits the strategy of this portfolio
and those things usually occur when there's more underlying problems with
the company so in that case i will probably sell my
shares of the stock now even if a company continues to pay
the dividend if there is some major change in the
core of the underlying business that i don't like
that may be another reason to sell the stock examples of that would be a
a big scandal involving the ceo that's really going to affect the company
or an accounting scandal like happened to enron or if i hold an oil stock a
large oil spill because i have learned my lesson from bp
so unless something major like that happens the goal is to just
buy and hold a stock collect the dividends
get that passive income machine building and get this thing
up to a hundred thousand dollars so i really think this will be a fun
experiment as we start dividend investing for passive income
and try to build this thing up from zero dollars to a hundred thousand dollars
so be sure to subscribe to the channel so you don't miss any of the updates
my next video coming out i'm going to show you the
first couple of stocks i have bought for this portfolio
and exactly how i went through and bought them using the robinhood app
oh and before i forget i made myself a note here on my ipad
i just started a facebook group for subscribers of my channel
where you can join the group we can get a good
good group of like-minded investors together we can talk about investing we
can talk about our personal finances and we can all become better investors
and better with our money together so the link will be in the description
below i hope you'll join me over there i think that'll be something fun to do
wait another way for us to connect as always you can also follow me on
instagram i post there all the time my handle is on the channel i forget
which corner i put it in and if you like this idea for a video
series hit the like button down below let me know you're into it and leave me
a comment let me know what do you think the first stocks i'm
going to buy are let's see if you're right
so that's all for this one i will see you in the next one where i reveal those
stocks so until then have a good one in this video i'll show you how to pick
stocks in this video i'll show you how to pick
stocks and i'll start building a in this video i'll show you how to pick
stocks and what am i going to say

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