(🔗link for the Excel sheet)

Once there were 3 friends who loved doing TikTok challenges. They were called Safety-First, Moderate-One, and Mr.Extreme. Today the friends were going to tackle the latest viral challenge. The 3 friends sat down at their favourite coffee bar to look closer at the details.

The challenge only required the participants to do 3 things:

1. Pick a dividend paying stock.
2. Decide how much money they each will set aside to buy this stock.
3. Commit to using this money to buy this stock once month.

The challenge lasted an entire 12 months. Could the 3 friends actually do it for the whole 12 months? Let’s find out.

They decided to go with a company called Verizon Communications. Verizon offers mobile, landline broadband internet and phone services. Verizon’s ticker symbol is ‘VZ’. Ticker Symbols are a Stock’s code name. The stock price in this story will be held the same for the entire year the 3 friends are buying.

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Safety-First chose to dabble only a small amount of money. She chose to put in $50 a month. Moderate-One scoffed and said she was not afraid and she committed to $200 a month. Mr. Extreme lived up to his name.

‘If I have to live on mac and cheese and even drive Uber in my spare time I will hit my monthly goal!’ he said. He chose to commit to $500 a month.

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Since VZ stocks cost $37.24 for one stock, Safety-First with her $50 could only buy 1.74 of the stock on her first month.

But first what is a dividend?

Well, a dividend simply means that a company will pay you a small bit of money a few times a year for every 1 share you own.

With Verizon, they are paying $0.65 for every share you own. Most companies will pay out once a quarter, that means 4X a year. With Verizon, their payout is in February, May, August and November. If the 3 friends started in January, Safety-First will receive her 1st dividend payout in February. How much does she receive?

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As Safety-First is contemplating if she should commit more money each month to this challenge, Moderate in the meantime is doing a happy dance in her living room.

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Moderate had committed $200 a month to this challenge. She had a fancy ice coffee habit that she really should kick. So, to kill 2 birds with 1 stone, she decided she would cut back on 1 cup of her extra large super fancy organic coffee and put the money for that 1 cup of fancy coffee into a piggy bank. She surprised herself how putting in $6.50 a day into the piggy bank added up to be the $200 she needed for the challenge. How much dividend does she receive?

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Meanwhile, Mr.Extreme has had to get creative to come up with the $500 a month for the challenge. He works a regular 9-5 job and his monthly paycheck already has been divided to pay for all living expenses. He only had about $100 to $200 he was squirrelling away into a savings account. Which meant he DID have to work for Uber as a driver for a few days a month to make enough to meet the $500 he had committed to. How much of a dividend payout does he receive?

At the end of the year Safety-First had passively earned $22.69.

Moderate had received $90.76
And Mr.Extream had received $226.91

Which amount can you pull off investing starting this month? Drop us a comment with the amount you would use based on your current situation.

Here’s the 🔗link to the simple dividend excel sheet we used to crunch the numbers.

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