Are you looking for the best monthly dividend stocks or ETFs that will pay you each month just for owning? There are a number of high yielding ETFs that payout dividends monthly, and there are a number of reasons why an investor would prefer getting dividends every month, as opposed to just every quarter, semi-annually or even once a year.
Why Monthly Dividends are the Best
I personally love monthly dividend stocks because of the budget planner I keep, because I plan my expenses that way. Nobody really budgets their money once every four years - so why would you want to get income like that? We want to budget our money - our income and our expenses - on a monthly basis. This makes is so much more convenient to manage money, and that's why I really love getting dividends monthly.
I like dividend investing because this is a great way to grow wealth over time while limiting risk. If you buy a couple of great dividend stocks or ETFs, you are going to build up a lot of wealth over the years, especially if you re-invest your dividends into your investments!Plus dividends make sense in an ultra-low interest rate environment, like we currently have.
Why make a measly 2 percent on bonds when you can buy dividend paying stocks or ETFs that will pay you more than that, with just as little risk? And why speculate your money in penny stocks when you are almost guarenteed to make a lot of money, much safer, with dividend reinvesting?
This is also called Compound Interest Investing, and it's crucial to understand. Simply put, your money MAKES YOU money, each and every year, and it builds up really fast. The interest that your first investment makes starts to make interest itself. You really will leverage the power of compound interest by doing this.
If you start investing at a young age such as 25, and let your money sit there and earn interest on the interest, there is really no way that you won't be a millionaire when you retire.
Dividend investing in ETF's is also passive income! This means you will make money every month without having to do anything - your presence and effort is not required to make money. For more info. on how to build passive income streams, read this article.
Great Book on Dividend Investing
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Examples of ETFs that Pay Monthly Dividends
Here are a couple of great Exchange Traded Funds (ETF) that will pay you a dividend every month:
#1 The Global X SuperDividend ETF (SDIV) - This is a super-high yielding ETF that currently pays 7.5 percent interest annually. The current price is $21.74 and it pays out $.1303 per month in dividends. It contains stocks from all across the world.
$5,000 example - 230 shares of SDIV will net you approx. $30 in income a month, or $360 a year. Easy money.
#2 PowerShares High Yield Dividend Achievers (PEY) - Why own bonds when you can own this? A high yielding dividend ETF - Four percent annual yield. Contains mid-cap value stocks so it is technically riskier than the SDIV.
$5,000 example - 530 units of PEY (price of $9.46) will net you $.035 in dividends every month. This amounts to $18.55 a month, or $222.60 annually. This is a good dividend fund that pays dividends monthly, but also has the potential of price appreciation!
#3 Blackrock Income Trust (BKT) - "Closed-end management investment company. The Trust investment objective is to manage a portfolio of securities to acheive both preservation of capital and high monthly income." At $7.40 a unit, this is an income trust paying a monthly dividend of $.04 a month.
$5,000 example - 680 unites of BKT will net you approx. $27 a month, or $326 a year.
*DISCLOSURE - Please know that this is not meant to be personal financial advice an this post is only for information purposes! Due your own due dilligence when investing.
If you want to read more on monthly dividend investing in ETFs or just dividend investing in general, check out this book below. It's called "Get Rich with Dividends" and it is a comprehensive guide to making money with dividend investing, limiting your risk as much as possible. It's one of the best rated books on the subject and one of my personal favorites. Or you could search for other good investing books here.
I hope you enjoyed this article on the best monthly dividend paying ETFs!
Another Great Book on Dividend Investing
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(price as of Sep 22, 2013)