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How can I invest in stocks? My income is $2,000 and I left with $400 after all my spending

If $400 is money you can invest, then you have more than 45% of Americans.

The best strategy would be, in my opinion, to invest in high quality dividend stocks – dividend aristocrats. Here is a list of all high quality dividend stocks – champions (aristocrats), challengers, and contenders, Dividend Growth Stocks CCC list go there, review the stocks, pick few, and familiarize yourself with those companies – what do they do, how they make money, how they performed during the 2008 recession, what are their threats which can eventually put them out of business, etc.

Pick 5 to 10 stocks (later on you may start adding more shares, but for the start 5 companies is plenty). And start buying those shares. Slowly, every month, little by little, a few shares by a few shares.

Pick a broker, which charges zero commissions so it will cost you nothing to buy a single stock.

Apply dividend reinvesting program (DRIP) – so you choose a broker which has this program. This will automatically reinvest all dividends and buy you more shares.

Once your stocks start paying you let’s say $30 or more in dividends every month, you can eventually remove DRIP and start reinvesting your dividends manually into other companies.

In the meantime, educate yourself on dividend growth investing. A good book is The Simple Best Investment by Lowell Miller. It will tell you everything you need to know to pick high quality dividend growth stocks.

Do this regularly for the next 25 years, and your account will grow to over $380,000 paying you approx. $57,000 annually in dividends (calculations based on $400 starting value, $400 monthly contributions, 25 years duration, 8% annual return, 15% dividend YOC, and compounded monthly, so note that the result may be different, but in the above calculated proximity).

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