Time is money. I find that phrase a little melodramatic, but it’s technically true. The quicker I can complete a task, the sooner I can process multiple tasks and the more money I’ll get. Of course, it might not be money on the line, it could be the time demands of my family, friends or other things. Either way, breaking down something that could take a lot of time and making it simple is a huge benefit. So if I had some cash to invest in UK dividend stocks but only an hour to allocate to it, here’s what I’d do.
Building a shortlist
Firstly, I’m making the assumption that I’ve got an investment account open to begin with. I’m also assuming that I’ve got the money in the account, ready to go. I’ve decided that my investing goal is to try and generate passive income (since I’m time poor) via UK dividend stocks.
From here, I’d start the clock by looking at public data showing the dividend yields of the companies within the FTSE 100. I can toggle the parameters to find a yield that I’d be happy with. Depending on how much money I have to invest, I’d pick between six and 12 companies that have a yield in the region I’m looking for.
If I have £1,000 to invest, I’d only pick a maximum of half a dozen. This is because the fees associated with buying stocks would eat into my funds. If I had closer to £10,000 to invest, I’d go up to a dozen stocks. This provides me with a higher degree of diversification. With UK dividend stocks, this is important in case one business decides to cut the dividend or suffers high losses for some reason.
Researching the UK dividend stocks
With the selection of companies on my shortlist, I’d then purchase a subscription to The Motley Fool Share Advisor service. Here I can read and see the recommendations on the stocks and whether the rating is a Buy, or Best Buy Now, rather Hold or Sell.
If I see a stock on which the team is very positive, I could decide to add that in to my shortlist. When I’ve got my half dozen (or so) UK dividend stocks for which I’m happy with both the yield and the outlook, I’m almost done.
From here I’d split up my investment amount evenly between the UK dividend stocks I’m keen to buy. Then I’d put the orders through on my account. Once these have settled, my work is done.
I’d estimate five or 10 minutes spent looking at dividend yields. Reading through the Share Advisor recommendations is a minimum of 30-40 minutes. Finally, five or 10 minutes to book the trades on my account. All in, one hour to start off a small passive income portfolio!
This is the speedy version of doing things, for people who are very busy. Ideally, I would want to spend a lot more time looking at things more deeply especially trying to spot opportunities instead of just being reactive.
Also, to get a well rounded view of a particular stock, I’d like to spend more time formulating my own opinion as well as reading the opinions of others. This would be my preference, but if I was in an extreme hurry, then the above can work for me.
