I Disagree with Joseph Carlson on Dividend Investing for Beginners
Channel: AbdulGSD
Date: 2020-08-21

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If you watch youtubers talking about dividend investing you may be familiar with Joseph Carlson. He is one of my favorites to watch on youtube as it relates to dividend investing. I agree with him on a lot of his approach. However, I disagree with him on his suggestion for beginner dividend investors. 

So in this video I go over his approach vs my approach.
Just to be clear, I think he has a good approach, however I think I have an even better plan for those who don't mind doing a little bit of work. 
I also update you guys on my M1 Finance dividend portfolio using my approach. 
And finally we talk a bit of news, Apple becoming a $2 Trillion Dollar company.
Hello and welcome to the channel, my name is Abdul, and on this channel I talk about dividend investing and other personal finance topics, my goal is to share my journey of building a dividend investment portfolio to generate passive income, with the ultimate goal of financial independence. If financial freedom is something that interests you, I will recommend you subscribe to be a part of the movement.

So like I said, I do like Joseph Carlson’s approach for most beginners however, I think my approach is even better for beginners who don't mind doing a little bit of work. In the next few minutes I will demonstrate his approach and my approach and compare the pros and cons of each approach.

Lets start with Joseph Carlson approach, his suggestion is that, if you dont have a lot of money, that you pick about half or ⅓ of the companies from his portfolio and just contribute to the account on a consistent basis. So currently he has about 34 companies in his portfolio, meaning if you are to follow his approach, you would take about 10 companies out of the 34 that you believe are good companies to invest in. then you setup a consistent contribution to the account with auto investment turned on. Lets say you decide your contribution is $100 every week(like me) then the $100 would be invested every week into the 10 companies based on their allocation target. That is his suggestion.

The pro about this approach is that you dont have to think about every week, you just know you are investing and its quite diversified. 

The con is that because the $100 is spread real thin, it will take a while to get substantial dividends. Because alot of the companies in the portfolio are blue chip stocks and so the average share price is above $100. As such you will own real tiny portions of the share and get pennies for dividends.

Now comes my approach, my approach is focus on getting the dividends quick. To do that, I have taken Joseph Carlson portfolio and take out certain companies I dont like and added other companies I do like. I then turn off the auto invest and I setup a weekly contribution of $100. With that each week $100 will be taken from my bank account to M1 Finance however, the $100 is not invested because auto invest is off so I have to go in and decide which stocks to buy for that week.

To help with that decision on which stocks to buy and get dividends quick what I do is that I input all the stocks in my portfolio into seeking alpha.com. I go to the dividends tab and arrange the stocks based on ex dividend dates. The stocks whose ex dividend date is up next I take a look at that particular stock to make sure its still go to buy and then buy that stock.

The pro about my approach is that I end owning bigger shares of the stock and get bigger dividends soon, that way they can be reinvested. Also it allows me the chance to go deeper into researching and understanding the company before buying.

The con is that my portfolio is not that well diversified but I am okay with that because I believe these are blue chip stocks and they are going to be here for a long time and I am ready to hold these stocks long term.

Let me know in the comments down below what are your thoughts on my approach versus Joseph Carlson approach?

And finally Apple in the news the Company is the first to hit $2 trillion dollars.

HashTags: #m1finance #dividendinvesting #fractionalshares  
Disclaimers: The above references an opinion and is for information purposes only. It is not intended to be investment advice.  Seek a duly licensed professional for investment advice. ALSO, Links in the description are typically affiliate links that let you help support the channel at no extra cost.