Why I HATE Dividend investing

Hello, welcome back to a new investing

video. Today I thought I'd talk about why

I don't like dividend investing and why

I don't think it's a good idea. So first

of all, we need to identify what exactly

is dividend investing. So there's

lots of different stocks on the stock

market. You've got the massive companies

like Apple and Microsoft and Walmart

and Amazon. And then out of these massive

companies, some of them pay you for

holding their shares. The biggest

dividend-paying companies would be usually

oil companies for some reason. I don't

know why, but that's just what it's like.

So if you have, for example, one share of

ExxonMobil— mobile, is it mobile or

mobile? I don't know, spelt weird, isn't

it? We'll just call it mobile because it's

easy to say. So if you have one share of

ExxonMobil, I think they give

you 85 cents,

something like that. No, I think it's a

bit less, maybe 50, between 50 and 70

cents. You have to look it up. I can't

remember this all off the top of my head.

I'm not bloody Einstein. So they'll give

you about 50 cents per share. So,

so what happens is they'll pay you this 50

or 60 cents 4 times a year, every quarter

after they release earnings. And you'll

get this 4 times a year as long as you

hold on to the shares. So if you have like

1,000 shares, they're going to give you

quite a nice amount of dividend money 4

times a year. Now, this sounds great. You

know, all you have to do is buy the share

and then wait for the dividends. But this

is a really boring way of investing.

Number one, the dividend companies aren't

going to grow much. They're already

massive companies that have already

peaked. They're not really going to grow

much. They're not going to 2x or 10x in

the short term. New term, far-term future.

So don't expect to buy like 1,000 shares

of EPD or Exxon or Chevron and then expect

the share value to go up by much. At best,

you're going to hope that the share value

is stable and doesn't really fluctuate too

much. The good thing about a dividend

stock is when the market corrects itself

or crashes, you're not really going to see

much of a massive crash or difference in

the share value of these huge companies

because they're just so stable. So you get

some companies like BGS, BG Frozen Foods,

and you look at the graph and it looks

like it's going up and down. But when you

put your finger over the bar chart,

you'll notice that it's only going up and

down by, I don't know, 10 or 20 cents.

It's really not a huge amount. You look at

the bottom of BGS and it was like 27.50,

and compared to now it's like 27.80. It's

hardly moved at all because it's very

stable. It's a stable dividend company.

That's good. But the bad thing is you need

huge amounts of money. Don't just put in

like £1,000 or £5,000 or £10,000 and

expect to get any more than a couple

hundred every time it pays out dividends.

You need to put in tens of thousands,

hundreds of thousands to even make

$500 a month. You have to put in insanely

huge amounts of money just to make a

couple hundred a month in dividends. And

if you've got huge amounts of money, like

you're some kind of millionaire, then

that's fine because you don't know what

else to do with your money and you might

as well just put it into a safe and stable

dividend company. But if you're like me

and you're not insanely rich and you don't

have hundreds of thousands, then if you're

relying on dividends as your dividend

strategy you are going to make money, but

you're just going to make it really,

really slowly compared to buying

into growth stocks like BNGO or Tattooed

Chef, who are gonna 2x or 5x or 10x in the

short-term, near-term future. The other

problem with dividend stocks is that you

don't know 100% for sure that they're

going to pay out the dividend. If the

company's fine doing business as usual,

then you probably don't have anything to

worry about. But in a crash or an economic

crisis like last year when you know what

was shutting down the economies, a lot of

these big dividend companies had to slash

their dividends because they just weren't

making the same amounts of profits that

they usually make. Oil companies were in

big, big trouble because airlines stopped

flying and people stopped using their

cars. People basically cut down on the oil

consumption by like 66.6%.

And this is not good because the company

relies on making money to be able to pay

that money to its shareholders. And if

you've got, if you're relying on these

dividend companies to pay you your

dividends and then all of a sudden they

say, oh, we're sorry, we have to slash our

dividends by 50% this quarter, or we don't

have any dividends to give out this

quarter because we're losing so much money

and we just can't afford, we either have

to make the company go bankrupt and

destroy the company, or we have to not pay

the dividends so we can save money and

keep the company afloat. Also,

you might, you might realize that it's a

bit of a coincidence that some of the

companies that have the highest paying

dividends are also companies in industries

that don't seem to have a very long future

ahead of them. For example, oil companies.

When everyone's talking about clean energy

and electric vehicles and sustainable

energy and cutting back on oil, um,

having a lot of money invested in oil

companies doesn't really make me feel very

safe and secure. It starts making me think

Oh no, this company is not going to be

around in 10 or 20 years. This company is

not going to be making the same amount of

money in 10 or 20 years. How are they

going to carry on paying the dividends?

They're going to slash the dividends and

then I'll be making way less money from my

dividends. Best to sell now so I don't

lose my money. And then there's another

company called Altria. They sell

cigarettes and they have a really good

dividend. And you look at the future of

the cigarette industry Is there really

much of a huge industry when people are

becoming more and more health conscious?

They're turning to things like nicotine

gum and vaping, and smoking cigarettes and

cigars just seems like something an old

person does, you know, like someone who's

40+ or 50+ sitting there in the armchair

puffing away at their cigars. Not really

something you associate with a young

person. I think in the future young people

are going to be less and less interested

in smoking cigarettes. And it just makes

me wonder about these tobacco companies—

how much longer are they going to be able

to pay out these really, really high

dividends without having to slash them to

save some money? Because they're going to

be making less money in the future, I'm

pretty sure. If I was a millionaire and I

had millions and millions, or maybe even

half a million, then yeah, maybe I would

put some of it into dividend stocks and

have a nice reliable amount of dividends

coming in. You know, there's, there's more

stable dividend stocks out there as well,

like Coca-Cola, or even Apple started

paying a dividend, but they don't really

pay much. But they're a much safer and

reliable company compared to oil

companies. So really, you have to think

about the future of the company. You could

get Coca-Cola or Pepsi or Johnson Johnson,

and they'll give you a moderate dividend,

but they have a much stabler future. But

then if you want more risk and higher

dividends, then you have to put up with

having a lot of money tied up in the oil

industry, which I personally don't really

feel that comfortable with investing huge

amounts of money into the oil industry

when everyone's excited about EVs and

solar energy and renewable energy.

So yeah, I've had a lot of money lying

around. I didn't really have any good

ideas for stocks to get. I'd probably put

a good amount of money into dividend

stocks just so I can get that reliable

quarterly dividend coming in for not

really doing anything. The thing is with

non-dividend stocks is you're constantly

checking up to see if the company's

growing or expanding or doing well,

because that's the only way you make

money. You only make money if the

company's doing well and the stock goes up

in value. You're not going to get any

money from dividends, but it's kind of a

different, different way of playing the

stock market, I guess. You've got

dividends And then you've got

non-dividends. It's kind of up to you

which way you want to play it. I guess

dividend plays are more like a steady and

stable way of doing it, kind of like the

tortoise and the hare race. Slow and

steady wins the race.

But for my personal situation, I don't

really have huge amounts of money to just

put into Coca-Cola so I can get $200 a

month. It's just not really worth it. I'd

be better off putting that money into

something that could grow short-term,

like Tattooed Chef or BNGO or NIO or some

up-and-coming starting company that has a

good potential to grow and expand in the

future. That's more what— that's what I'm

more interested in. I'm not really

interested in Coca-Cola or, you know,

boomer stocks, they call it stocks 50 or

60-year-olds would put their money into.

Coca-Cola, Pepsi, Boeing,

American Airlines, stuff like that. It's

kind of boring to me.