25. What is Income Investing

Download Preston's 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location: http://www.amazon.com/gp/product/0982967624/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0982967624&linkCode=as2&tag=pypull-20&linkId=EOHYVY7DPUCW3WD4 http://www.amazon.com/gp/product/1939370159/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1939370159&linkCode=as2&tag=pypull-20&linkId=XRE5CA2QJ3I2OWSW In this lesson, students learned the importance of Income Investing. By employing the techniques of income investing, one can prepare themselves properly for retirement. Since income investing is the process of picking stable stocks and bonds that pay decent dividends and coupons, the investor can benefit from the cash flow that's produced by these securities. The first way income investing provides benefits to the investor is through liquidity. Since the investor will continually receive dividends or coupons, they then have the opportunity to reinvest that cash flow into the most undervalued asset each month. This compounding cash flow is truly the essence of investing like Warren Buffett. With an ever increasing cash flow, investors can take advantage of market conditions during spikes and valleys. The second way income investing provides benefits to the investor is during retirement. Since most retirees may need to sell their investments in order to pay their monthly lifestyle expenses, income investing offers an alternative approach. Since the retiree will receive quarterly and semi annual payments from these types of investments, they will continue to have a steady cash flow to meet their lifestyle expenses. Although some retirees may need to pull from the principal, income investing will minimize that withdrawal. In the end, Income Investing creates more cash flow for the individual employing the technique. It's Warren Buffett's opinion that purchasing dividend paying stocks is a very wise decision because of the continued and consistent cash flow that provides liquidity to reinvest your earnings.

Comments

1. first of all, would like to take a second to thank you Preston. you're a mentor to many who are new to this investing world. you're sincere about your teachings and it reflects. I have a question about the reinvesting from those dividend payments. wouldn't it make more sense to not reinvest constantly because you would be getting charged "X" amount for each transaction. better wait to reinvest in bulk instead of small amounts consistently?
2. How do I check if 1/3 goes into dividend and 2/3 goes into the book value growth?
3. You'd be broke by 80...Good thing the average lifespan is 79!
4. thank you. God bless you
5. This is a great channel. Just commenting to thank you man, this stuff is awesome! Surprised more people aren't watching this.
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7. hello sir... been watching your vids and have been a huge help. just wanted to ask if there is a part 26?
8. No
9. Do we have to pay capital gains taxes on dividends that are reinvested? 
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11. 0.28 is lower than 0.5..
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14. mendacium, I'm not sure how to answer your question....by .22?
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16. MrSonibros, I really appreciate the compliment! It really means a lot. Keep up the great work with your channel. It's impact is definitely helping people with their approach!
17. Preston, I know I have already mentioned this, but damn! Your videos are great. Realistic example, realistic and exceptional results, all done by following a value strategy. Although my videos are presented in a different style, I hope one day they will be up to par with your videos when it comes to quality. Keep it up Preston.
18. Kevin, a dividend is simply a payment that a company provides to it's owners. Most company's pay a dividend 4 times a year. If you own shares of a company, then you're an owner.
19. Thanks Yan7190
20. im watching all your videos. its very helpful since im only gonna start investing. thanks!