If you want to generate passive income from a portfolio of dividend shares then there are a number of things that you will need to know.
Investing in shares is not the same as putting your cash into a bank savings account, for example.
If you have a bank savings account then you already know about interest and you’ll also know that you’re not earning much interest from your savings and haven’t been doing for many years now.
That’s because interest rates have been ridiculously low for years, the lowest in our lifetime in fact.
What’s worse, there’s no sign of that changing anytime soon.
So if you want to generate a higher return on your cash, you’ll need to invest your money elsewhere.
If you’re starting to think about investing in dividend shares but you don’t know how to best go about doing that then this article is for you.
How To Start Investing For Income
If you are starting at the very beginning and want to know what dividends are and where they come from, then you can find out about dividends here.
Having got the tools for the job, you now need to know how to put them to good use.
This article explains how to identify high yield shares using those 3 key dividend ratios together.
Lastly, there a couple of other things that it is worth knowing before diving in.
For example, it’s worth checking the dividend dates and ex-dividend dates, etc. before buying or selling any shares.
Finally, it’s worth knowing that companies can cut their dividend from time to time, usually without much warning.
So it’s worth knowing the reasons why they do this to try and ensure that you don’t get caught out.
The Best Way To Build Passive Income With Shares
Build a portfolio of high yield dividend shares and, over time, you will be able to generate a useful source of passive income for very little effort on your part.
Remember, this does not have to be an all or nothing approach.
Indeed, I always recommend that you clear your debts and have sufficient cash stored in cash savings to cover any potential emergencies.
Any cash in excess of that amount though should be invested.
I invest my money into shares that provide income from high dividends just as I’ve described here for my retirement account (SIPP) and my tax-efficient ISA.
I also invest my money into shares that don’t produce any income but could potentially multiply in value several times over.
In other words, I split up my investments into different baskets and apply different strategies for each.
And you could do the same.
If you want to earn more income from your savings/investments and start learning how to invest in shares then sign up for the FREE guide below.
And if you’d like my personal help in doing it, check out my Shares Coach Online service here.