There are many types of investments available to investors today, and each type of investment is geared towards a specific type of investor. Dividend stocks are a type that is in my opinion, good for the younger investor who is just getting started. Dividend stocks start paying you as soon as you buy them, and continue to pay every dividend date, for as long as you own the stock, providing that the company does not cut the dividend or go out of business.

Dividend returns on stock are typically higher than the interest paid on savings accounts and certificates of deposit, but come with a slightly higher risk. The price you pay for the stock may drop in the future, leaving you unable to sell the stock for what you paid, or the dividend may be reduced, and this is why it is important to focus your purchases on companies that have a strong chance of being around for a very long time, and a good history of paying steady dividends. These companies over time will increase in stock price if they show great promise or proven results, and the dividend has a good chance of increasing if the company shows a greater profit each year.

Some stocks pay their dividends quarterly, and some pay monthly. I prefer to focus on monthly dividend paying stocks, allowing me to receive a check every month. The monthly check is small when you start out, but as you increase your holdings of dividend paying stock, the check will get larger and eventually it will become enough to support your lifestyle without the need for you to maintain employment.