FREE STOCKS!

I mentioned this ploy in a recent post about updates to my stock portfolio, but I thought it would be good to go over it again. Two of the stocks I sold recently had went up considerably since my initial investment. Instead of closing out my entire position in both stocks, I only withdrew the amount of my initial investment. In other words, I took out the entire amount of money I had invested in each stock and kept the remaining shares. Which means I am still a shareholder, still drawing dividends on both stocks, but none of my money is invested in either one. Free stocks!!!

No matter how good or how bad these shares perform in the future, it's nice to know that I'm risking none of my hard earned money. If they keep paying dividends and keep increasing in value, fantastic! If they eventually halt dividends and go completely under, I've lost none of my own money. In the mean time I benefit from any future dividend payments, which I'll take in cash and redeploy elsewhere. What's really exciting to me is that this process can be repeated over and over. I could eventually own several stocks, drawing untold amounts in dividend income, that I have none of my own money tied up in!

I've known about this tactic for quite some time, just never put it into practice until now. While I probably won't make a habit of selling stakes in winning positions, it's good to have one more tool for the wealth building process. It's really true, the more you learn about stocks and investing, the easier it is to make money.