Why dividend stocks are ‘magic’ for younger investors
Dividend-paying stocks are popular among retirees, and for good reason: The cash that companies distribute to their stockholders is a form of truly passive income.
A retiree with a $1 million stock portfolio paying a 3% average dividend yield can expect $30,000 a year just for holding the stock. But dividend-paying stocks have plenty to offer younger investors, too, says Jim Cramer, host of CNBC’s “Mad Money” and author of “How to Make Money in Any Market.”
“I love dividends,” Cramer tells CNBC Make It. “And the reason why I love dividends is: If you keep them in your fund by reinvesting them, you end up with just a huge amount of stock that you never thought [you’d have].”
In other words, if you take your cash distributions and use them…
