Dividend investing is an excellent tool to stack wealth. Dividend stocks let your portfolio tap onto the magic of compound interest right away. Buying dividend stocks is like buying a house and renting out the rooms. You will be getting the benefits of growth with the added kicker of quarterly or even monthly dividend. Dividends also allow for a good way to build an income stream. The real power of the dividend comes from the reinvestment however. That is how your money will truly make money. Hey, if it works for investing powerhouse, Warren Buffett, than it should work for us average Joe’s as well.

The Balance

Dividends are payments a corporation makes to shareholders. When you own stocks that pay dividends, you are receiving a share of the company profits. Dividend investing allows you to create a stream of income in addition to the growth in your portfolio’s market value from asset appreciation.