Please take note that this is part one of a three-part article series. Do read all three articles to gain a look at this approach and the way to make the most of it entirely.

There are many methods to earn cash in stocks and shares, even for stock market rookies. Besides the traditional method of getting income through going long or selling high and backing back low, we will be contemplating another approach to getting semi-passive profits through the stock market which does not need considerable work. However, there is a quandary here: if you happen to be willing to work harder, the greater you can earn over the long term with this approach.

One of the more accepted and no-fuss methods to earn a passive income inside the stock market is to purchase high dividend holdings. Look for listed corporations that may prevail the test of time, are doing very well as well as pay an ample dividend (minimum of 4%). Another means would be to seek out businesses that trade in commodities e.g. mining, oil, and agriculture. A number of them pay well to their shareholders, particularly if their outcomes are first-rate because of the high prices of the commodities they’re dealing in. When you possess dividend stocks, the stock price is generally not the primary concern as you are looking out for good payouts for the shares you possess. REITs (Real Estate Investment Trust) are also a great way of using the dividend strategy to realize passive income.

Do take note that there are dangers concerned in using this strategy of receiving passive returns. However, there is a chance the stock price might go down in bear markets or corrections and will not revisit the price you have purchased the shares for in the very first place. This would suggest that you’d have lost your hard-earned wealth as opposed to getting passive income. Another opportunity is that stock markets collapse before economies do and just about all companies will do poorly in a slump. When their profits are affected, they tend to remove their payouts and this will likely lead to a loss of your passive earnings. In the recent market chaos, many good corporations actually slash or take out their dividends and payouts, affecting lots of people as they relied on it to survive.

It is possible to still use the dividend plan and to remove the risks involved, thus creating a win-win scenario for us. Before we delve into it, it is important to consider the original strategy along with the profiles of those that are suitable to use it. Buying dividend shares is often a fuss-free method of getting passive income for the following types of individuals:

1) the Baby Boomers who are retiring soon and can survive off the payouts,

2) people on the go with work and other things with little time for developing stock-picking expertise but desire to obtain steady passive income for the remainder of their existence,

3) people with long-term views, say 10 years or so,

How is it doable to reduce the risks and increase the potential payback of buying dividend shares? To be able to achieve it, one must always time the stock market to spot uptrends and downtrends. It is crucial that some education in stock market essence for rookies is wanted. Once you’ll be able to perceive trends in the stock market indexes, it is way faster and easier to ramp up your yearly gains in the stock market, thus making you rich far faster than pure dividend share investors.

In advance reading Parts II and III among the installments, you must do these:

1) read Part I above and understand the opening to the tactic,

2) follow the link above to possess a plan on how to time the stock market (do visit the blog for stock market for beginners),

3) have an overall feel of the economy; how it is behaving, whether there maybe there a harsh depression in place (like what has happened in the final 2-3 years is thought of as pretty severe,

4) possess a general idea of the basics of a company you have an interest in as a stock pick (check out the link offered)

With all these completed, you are now ready to read up on Parts II and III and will have an entire picture of how it really works not to mention why it is better than pure dividend plays. This will likely be shown to you in the other articles on Parts II and III of how to earn semi-passive income from the stock market.