25. What is Income Investing

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Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location:
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In this lesson, students learned the importance of Income Investing. By employing the techniques of income investing, one can prepare themselves properly for retirement. Since income investing is the process of picking stable stocks and bonds that pay decent dividends and coupons, the investor can benefit from the cash flow that's produced by these securities.
The first way income investing provides benefits to the investor is through liquidity. Since the investor will continually receive dividends or coupons, they then have the opportunity to reinvest that cash flow into the most undervalued asset each month. This compounding cash flow is truly the essence of investing like Warren Buffett. With an ever increasing cash flow, investors can take advantage of market conditions during spikes and valleys.
The second way income investing provides benefits to the investor is during retirement. Since most retirees may need to sell their investments in order to pay their monthly lifestyle expenses, income investing offers an alternative approach. Since the retiree will receive quarterly and semi annual payments from these types of investments, they will continue to have a steady cash flow to meet their lifestyle expenses. Although some retirees may need to pull from the principal, income investing will minimize that withdrawal.
In the end, Income Investing creates more cash flow for the individual employing the technique. It's Warren Buffett's opinion that purchasing dividend paying stocks is a very wise decision because of the continued and consistent cash flow that provides liquidity to reinvest your earnings.

[@anjutamang2542]

It's 2018 and i am now watching all the playlists . this is so great. thanks for sharing with us. this has taught me a lot .

[@scarlettmass1175]

Anju Tamang Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@MrJuzzi3]

how has your investing career been so far?

[@MrJabbothehut]

2021 over here!

[@Darthdeedee91]

This is a great channel. Just commenting to thank you man, this stuff is awesome! Surprised more people aren't watching this.

[@Alex-nl7fj]

I'm watching it (⊙＿⊙)

[@RaoEA]

Dear Preston, Your content is simply outstanding. My favourite channel and I recommended to all my friends, colleagues and family.

[@MegaHugro]

Gotta say I have watched a slew of other tutorials on a gazillion subjects, but this guy's voice is great. He uses good English at the proper speed and modulation, and after watching all 3 courses twice in 4 days I appreciate that. Sometime, I'll have to watch a video that's not 8 years old to compare.

[@vladl990]

It's 2020 and I am now watching all the playlists. This is so great! Thank you for recording all these technically clean and clear videos!

[@kirtan23]

Thank you so much for everything. So hard to find an honest presentation.

[@hodlcoin3306]

first of all, would like to take a second to thank you Preston. you're a mentor to many who are new to this investing world. you're sincere about your teachings and it reflects. I have a question about the reinvesting from those dividend payments. wouldn't it make more sense to not reinvest constantly because you would be getting charged "X" amount for each transaction. better wait to reinvest in bulk instead of small amounts consistently?

[@h.a.s.7336]

Mr Pysh! I've been going through your courses. Wow, you are an incredibly gifted teacher and I'm so thankful you are willing to share this gift and knowledge. Amazing... With this video, however, I think people would be helped by "Philippians 4:6" ; )

[@scarlettmass1175]

H.A. S. Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@yan7190]

im watching all your videos. its very helpful since im only gonna start investing. thanks!

[@stevenngugi9096]

thank. this course has been key for my development

[@elsybarhaona3546]

Hey preston thanks for sharing your knowledge and experience, may God blesss you

[@7585prashant]

its 2020 and i am now watching all the playlists

[@SoniBrosInvesting]

Preston, I know I have already mentioned this, but damn! Your videos are great. Realistic example, realistic and exceptional results, all done by following a value strategy. Although my videos are presented in a different style, I hope one day they will be up to par with your videos when it comes to quality. Keep it up Preston.

[@GenXstacker]

Good stuff. is it effective to use a mutual fund like the vanguard Wellesley income admiral instead of doing the income stock and bond picking yourself?

[@kanchr7537]

Thank you very much for all these wonderful tutorials. In your previous video , to calculate intrinsic value we need historic book values and EPS. I see that msn doesn't have it anymore and Yahoo made it available for only premium members. Can you suggest any brokerage firms or sites that provides these data other than Yahoo. Thank you.

[@tinnguyen2219]

Thank you so much for sharing such useful data! Greatly appreciated!

[@scarlettmass1175]

Tin Nguyen Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@jaesser]

hello sir... been watching your vids and have been a huge help. just wanted to ask if there is a part 26?

[@bourgeoisiewhacker2405]

Yea there is. 26 is just out of place lol

[@valezkaocando1908]

Hello! Thanks for your fantastic video! I would like some clarification as well, please. According to your rule of thumb, you are saying that when the company makes e.g., $1200 in total revenue, you prefer if they use $400 (1/3) towards dividends and $800 (2/3) towards the business (to increase book value)?

[@imlkr_]

Exactly right! He prefers 33% of the income to be distributed as dividends and the rest 67% get reinvested back into the business. This ensures regular cash flow to the investors as well as appreciation in their capital!

[@CE-vd2px]

Hi Preston, on the investors podcast i thought you stated you want companies that dont pay dividends since you are young. Dividends are for old people right?

[@MegaHugro]

Now I'm wondering if auto-investing my dividends back into the payer as a fractional share is the way to go, or maybe direct it to my Vanguard settlement MM account and hold there till I have enough to buy a different company, with an equal or better value.

[@HokkeeKun]

How do I check if 1/3 goes into dividend and 2/3 goes into the book value growth?

[@crazycat2969]

Check the payout ratio of stock

[@daanvandooren6335]

Hi Preston Pysh, i've been watching your playlists for some time now and I believe they're the best way to get into trading stocks. However, i live in the Netherlands and are there any major differences in stocktrading in europe and stocktrading in the USA? I'm asking this because i'd really like to get started with trading but i still am a little cautionous. Thank you though!!

[@scarlettmass1175]

Daan van dooren Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@talcohen1346]

AMAZING!!! So well explained...Thanx

[@scarlettmass1175]

Tal Cohen Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@mannyonsase3892]

thank you. God bless you

[@scarlettmass1175]

Manny Onsase Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@michiganjim3615]

I would sure like these videos better if you would refer to dividend yield in percentages. It's so much easier to do the math in my head.

[@The_Engineer]

🥳 happy new year 🎆

[@samwheller]

Thank you Sir.

[@yan7190]

how can i define companies that pay dividends from those who dont? thanks!

[@youcan5863]

Thank you 🙏

[@camgray94]

Aren't dividends paid quarterly, meaning you're income rises quarterly? Or were you just using monthly to simplify your example?

[@imlkr_]

Well it actually depends on the country you are living in. Some pay dividends quarterly which you receive as an income directly into your bank account!

[@robertocanales1201]

Thank you very much! 😑🙏🏼

[@aeterna789]

It saddens me that this very informative and life changing video only has 100k views while other useless time wasting videos has millions.

[@imlkr_]

And no surprise that there are only 100k people living a financially independent life while those millions are still wandering aimless...

[@Fj8282haha]

Problem is the tax on cash income is high… ? compare to long term capital gain to sell a stock, say warren’s Berkshire Brk.b

[@givemetoast]

Do we have to pay capital gains taxes on dividends that are reinvested?

[@cameronmilne3590]

givemetoast No. For example you wouldn't pay capital gains tax on an index vanguard fund.

[@cameronmilne3590]

@@analogeit over a long enough period of time an index vanguard fund would perform better than 85-95% of all actively managed funds.

[@Widdget]

@@cameronmilne3590 ​This might be true of vanguard index funds, if that fund is set up to automatically reinvest your dividend payments (AND does not give you the option). In the general sense though (with typical common stock holdings), the dividend amount shows up in the cash holdings of the broker that the stock is purchased with. The IRS will consider it income on your 1099. Typically, dividend income from US companies is considered "qualified" and you will pay a reduced tax rate (maximum 20% as I type this).

[@Gurjars007]

Thanks you sir ❤️

[@darkside907]

I am currently 30, Ive been mostly a value investor/growth investor for about 3 years I have about 1700 in stocks but i have never cared about dividends and really only relied on short selling stocks to make money- I have about 14k in savings- 2k in crypto. I use investment apps like cash but robinhood and webull will not acceppt me?! I do not know why but i also want to know what companies I can get into that will pay dividends. Any one have advice?

[@scarlettmass1175]

half unlit Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@ssonicdeafmonkey]

Could someone explain this: Psych likes buy companies that put 1/3 of earning into dividends and 2/3 into book value growth of business. Is he using the EPS for these calculations or something else?

[@trader96.]

Yes he is.

[@imlkr_]

He is basically saying that it is better to buy shares of a company to distribute 33% in dividend the 67% reinvested back into the business. If the company earns an EPS of $10 then $3 goes directly into your pockets as dividends and the rest $7 is reinvested back into their business for growth. This ensures regular cash flow for the investor as well as growth in their capital!!

[@scarlettmass1175]

ssonicdeafmonkey Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@leontedev]

For most companies EPS is not equal to dividends + book value increase... I don’t get it - where is the rest of the earnings going?

[@jakestakes9075]

He mentioned this in the calculating intrinsic value video. Some money is just simply lost for whatever the company is doing with the money.

[@milos468]

Legend!

[@scarlettmass1175]

Milos Vojvodic Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@TruthWil]

You'd be broke by 80...Good thing the average lifespan is 79!

[@itsumonihon]

solution: hookers and blow as much as you can afford til you crash and die before age 35. win win.

[@rocknroller167]

Or in the nursing home that has taken your house and all your savings and the government is keeping you alive. Sad but true.

[@scarlettmass1175]

TruthWil Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@rist98]

0.28 is lower than 0.5..

[@trollface1994]

I LOKE WARREN BUFFHEAD. DO YOU?

[@gruminatorII]

Why invest in Bonds at all at 0,4 % coupon, its rediculous !

[@scarlettmass1175]

Philippe durrer Hello Thank you for making out time to read this. There’s an opportunity for you to be part of the great future ahead. MSA Securities LLC is a very distinguished, experienced and promising organization in the field of trustee administrations and long-haul investments. The Registration or joining of such distinctive systems and techniques like MSA Securities LLC help you generate income, gainful collaboration and organized advancement. The most established territory of MSA Securities LLC is Digital assets trading on the Forex market. Since 2008, we offer the best conditions for financial specialists from the United States (USA) and will be prepared to see you among them. Our brokers are proficient money related investigators and experienced specialists in remote trade,trading and analyzing with the securities and shares of various USA organizations. They have all the information and abilities that are important to be required for beneficial trades and expand of benefits with sensible risk. Register to startup your investments with MSA Securities LLC @ msasecurities.holdings/register Contact Email : [e-mail]

[@bdavis1645]

No

[@stevenngugi9096]

thank. this course has been key for my development