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Ideas for Income Investors. High Dividend Stocks, Mutual Funds etc.
10 Dividend Stocks for a Rainy Day
Posted by: Dividends4Life (IP Logged)
Date: January 15, 2014 09:30AM
A pessimist might say life is a series of bad things happening... then we die. I certainty wouldn't go that far, but life often deals us unfortunate circumstances to work through at what seems to be the most inopportune times. During this most recent economic downturn, many people lost their jobs at a time when companies weren't hiring. When things like this happen, those with an alternative income, including dividend growth stocks, are in a better position to deal with the circumstances thrust on them.
Here are some things you can do today to prepare for your financial rainy day:
Have a Plan
If you suddenly found yourself unemployed and were unable to immediately replace the lost income, do you know what you would do? I suspect there are few families that have given a lot of thought to this. It is like buying a cemetery plot — it is not high on the list of things to consider. The drive home after receiving a pink slip is too late to start planning; at this point you should be in a position to start executing your plan.
Prepare to Execute Your Plan
Schools and businesses have fire drills for a reason. We all know we need to get out of a burning building, but do we really know how until we practice. Several years ago, my employer had a fire drill and too many people were going down the stairs on one side of the building and this created a traffic jam. If it had been a real fire many would have lost their lives.
Develop Alternative Income Streams
One of the best ways to ensure financial success is to develop alternative income steams. If one stream dries up, you have others to fall back on. We all have things we are good at; most can be packaged in a way to provide alternative income. Again, this is not something you can quickly develop — the process must be developed well before it is needed.
Dividend Growth Stocks
One of the best alternative incomes are from Dividend Growth Stocks. Just like a regular job they can provide you a steady and growing income. With advance planning, your income portfolio can become the foundation of your contingency plan. Here are several dividend stalwarts to consider when building your income portfolio:
The Bottom Line
Even if you never lose your job, one day you will retire and will face a very similar situation. Your salary will go away, replaced by much smaller Social Security payment, and possibly a pension payment (for a shrinking group of employees). More and more retirees have to manage their nest egg to ensure they don't run out of money. A good plan, the ability to execute and multiple revenue streams including blue-chip dividend growth stocks will make the transition much easier.
Stocks Discussed: CL, EMR, GPC, JNJ, KO, MCD, PG, T, WMT, XOM,
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