Why Dividend Investing Works for All Ages

We're also rounding up earnings results you might have missed and explaining why you need to read the fine print of your company's 401(k). --------------------------------------------------------------------------------------------------

View this email in your browser Ah, dividends, a friend to investors everywhere. Not familiar? We'll introduce you. We're also rounding up earnings results you might have missed and explaining why you need to read the fine print of your company's 401(k). — Katie Carrera, Stock Up Editor Why Dividend Investing Isn't Just for Retirees Rik Silverman/The Motley Fool Although it is often discussed as an income strategy for retirees, dividend investing strategies can be valuable for investors with a range of styles and variety of holding periods. They're especially important if your goal is to build wealth in the stock market. Just look at the chart below for an idea of how dividends can boost your return over time. Rik Silverman/The Motley Fool It's important to note that companies aren't required to issue a dividend — a recurring cash distribution to shareholders. But many that do commit to increasing it as often as is financially feasible, and a large number consistently bump up payouts annually as well. Key advantages: Dividend increases expand the amount of yield an investor receives over time on the original cost basis of a stock, which can represent powerful growth over time. Dividend reinvestment strategies also represent a bonus: Additional equity in what can still be a growing company — dividend payer doesn't have to equal stodgy — without any additional out-of-pocket cost. Calm in the storm: Dividend-paying stocks, even high-growth ones, are often less volatile than their counterparts. That's thanks in part to a valuation method (the dividend discount model) that focuses on the company's worth in cash returned to shareholders, rather than models based on future earnings. Companies that aim to boost payout also naturally focus on making sure their cash flows are predictable, which can help them hold up amid macroeconomic uncertainty. Read the rest. And you can also check out tips on how to assess dividend-paying companies. Already subscribed to a premium service? Click here to view your subscriptions. Not a member yet? Click here to sign up! FEATURED PODCAST A Foolish Guide to Buying a Home Home sweet home or a money-pit nightmare? Ross Anderson, a planner with Motley Fool Wealth Management, stops by Answers to take part in our series on major life events. Subscribe on iTunes SPONSORED In partnership with Ten years ago, a Harvard Engineer named Chad Laurans saw the home security industry was broken and out set out to fix it. How? By getting rid of everything that makes home security a pain. There's no contracts, no middlemen, and no fine print. You get 24/7 protection—for less than ½ what traditional companies charge. Protect what's yours today. Earnings Season Roundup It's the height of earnings season, which means there's plenty to keep up with. Here are a few company updates that you might have missed. Groundings take a toll: Pretty much all of Boeing's business results took a turn for the negative as the company reckons with the extended grounding of the 737 MAX jet. And it's not likely to get better until deliveries of the jet resume, which won't be before November at the earliest. Users ahoy!: Snapchat's parent company stunned, well, everyone by adding 13 million users in the second quarter. It's the company's biggest sequential jump in users since 2016 and a welcome development after the base stagnated. But is the growth sustainable? Burritos are back: Chipotle had an impressive second quarter with 10% comparable-restaurant sales growth. One big part? The company's efforts to increase digital sales, which nearly doubled from a year ago. Optimistic outlook: Drugmaker Biogen wrapped up a solid first half that gave management the confidence to raise guidance for the full year as it turns to its pipeline candidates. Watch: What's the Best Age to Collect Social Security? Deciding when to retire and start collecting Social Security requires taking an honest look at your finances, work situation, and post-retirement expenses. We're breaking down those factors and more in this episode of FAQ. Not sure what to ask your smart speaker? Keep up with what's happening in the market by adding our daily flash briefing to your home assistant. Just look for The Motley Fool on your Amazon Alexa or Google Home app, click subscribe, and then you're good to go. Think a 1% 401(k) Fee Is No Big Deal? Think Again. If you have an employer-sponsored retirement account such as a 401(k), do you know what fees you're paying to invest in it? If not, it's worth tracking those details down through your plan summary and prospectus. We'll wait. Why? The fees that retirement plans charge and the expenses that vary based on the type of investments you choose within the account, can cost you thousands or tens of thousands of dollars each year. (If you didn't realize fees were part of the equation, it may be because the money comes directly out of your account.) Consider this example: There are two individuals, who are both 25 and planning to retire at 65. Each makes $50,000 per year and puts 10%, or $5,000, of their earnings toward retirement each year. They both anticipate a 7% annual rate of return. The only difference between the two is that one has a 1% 401(k) fee and the other has a 0.5% fee. After 40 years, the person with the larger fee will have about $774,000 in the retirement account. But the person with the smaller fee will have $878,000. That's a difference of $104,000. The person with the 1% 401(k) fee would have to save an additional $674 per month for 40 years to retire with the same amount as the person paying less in fees. The good news is you can take action, and it starts by finding out what fees you're paying. Read the rest. Easily track your favorite stocks with our new browser extension for Google Chrome. Add it to Chrome by going here, then open a new tab and use the "Manage Tickers" button to customize the page with your favorite stocks. Quick Reads Microsoft had an amazing fiscal year, and here's a case for why it could repeat that performance in 2020. Chewy's first earnings report as a public company was pretty good — but not good enough. Theme parks are struggling this summer and we have four ideas as to why. Social Media Post of the Week See all our posts! Join the 1,300,000+ people who follow us! We work fervently, feverishly, and Foolishly to make sure all the facts and figures we publish in our emails are 100% accurate and up to date. Returns as of July 24, 2019. Have a question or topic you'd like to see covered in a future edition of Stock Up? Email us at stockup@fool.com. Our mailing address is: The Motley Fool | 2000 Duke St. | Alexandria, VA 22314 Want to change how you receive these emails? You can update your preferences or unsubscribe from this list. This is a promotional message from The Motley Fool Copyright © 1995-2019 The Motley Fool. All rights reserved. Legal Information.