How Healthy Dividend-Paying Stocks Can Boost Your Portfolio's Returns

Need more money? You're certainly not alone. Investors of all levels are scratching around trying to find decent income to supplement their other investments – especially now that food and other costs are starting to spike. Trouble is, with interest rates still so low, bonds, CDs and money market funds just aren't getting the job done for many people. As a result, investors are chasing yield-bearing stocks in order to generate the income they want. That's fine… as long as you remember that it's not just the amount of income generated that's important, but also the reliability. And if you're using the income to pay the bills, the stability of the dividend becomes even more critical. For example, let's assume an investor figures he'll need $40,000 per year in dividend income to pay his mortgage and food costs. But what happens if two of the companies in his carefully structured $40,000 dividend portfolio suddenly cut their dividends and he now only earns $34,000 from it? That $6,000 shortfall means he needs to dip into his capital to make up the difference. As a result, his income in the following years will be lower, as he's starting with a smaller investment base. For that reason, it's important for income investors to have a firm grasp on one key number…... Read more