 Hey, what's up YouTube? I'm Zeke and welcome to the dream green show in this episode I'm going to be gone over what is dividend farming. Is it something that's good for you? Well, if you stick that this entire video, you guys are gonna know everything you need to know about dividend investing It's dividend farming for you. You're gonna learn about dividend yield ex dividend dates the whole nine guys So make sure that you stick that to a tired video So you don't miss out on any crucial information Go ahead and scroll down and hit the thumbs up button because they help set this channel more than you guys can even imagine But before we dive into this video, this video is brought to you by Weeble Sign up now by clicking the link down in the description Deposit any amount of money and you guys will receive five free stocks valued up to $9,300 those five free stocks You could keep them inside the platform and decide to use it or you can sell those five free stocks in which are all of your Money guys, it's literally free money. 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So as you guys already know some company payout dividends to their investors that is a way for them to say hey Thank you for investing to our company. Here's a little small percentage of our profits that we're gonna send to your investors So that either a you could reinvest it back into our company or you could do what you want to do with it Some people use dividends to completely retire. That is the best form of passive income You don't have to do anything at all and you receive a paycheck every single month or quarter And some people use their dividends just to pay off the bills around the house So when it comes to dividend forming There's a exact date that every company says that you have to have them inside of your have to have shares of them inside Of your portfolio and if you have shares of them inside of your portfolio by this date We're gonna go ahead and record that data database and whether if you sell the the shares of that company or not the next day As long as you have them inside your portfolio by the time they record this data You are gonna receive dividends from that company by the time that they pay out their next dividends Whether if you have them in your portfolio or not so that is what some people call dividend forming So let's say company a records it on the first So you will buy shares of company a on the first and then on the second after they have recorded that data You're gonna head and sell those shares. So you so you just gonna take all of your money Let's say five thousand dollars thrown into company a on the first and then sell it on the second So now let's say you receive a 1% dividend yield on those shares Just from you buying in on Monday and then selling it on Tuesday And you're receiving 1% of dividend yield on company a and then let's say company B Does it on the third and fourth and then company C So you go throughout the entire month chasing dividend yields which are five thousand dollars And that is called dividend forming when you're going from company to company to company to company Binding it on the first day and then selling on second day and then collecting those dividends in the future Sounds like an amazing idea. Why isn't everyone doing this one? This video I'm gonna show you whether this is a strategy that you should do yourself Or if this is a strategy that just does not work out over time in the long run So let's go ahead and pull up the charts right quick. All right So here we are on coca-cola coca-cola is a dividend king that mean they have been increasing that dividends Every single year for the last 50 plus years In fact, they have increased their dividends for the last 59 years right now coca-cola is at $65 and 25 cents Now the reason people don't buy now the reason a dividend farmer was not just buy coca-cola 100 shares of coca-cola keep it inside their portfolios because they don't want the fluctuations of coca-cola price gone up and down Up and down all throughout the months into the next dividend date into the next dividend date So they're just gonna say hey, we're gonna eliminate the fluctuations completely We're gonna buy it on the ex-dividend date and then we're gonna sell it the day after but let me show you guys Exactly what you guys should be looking at. We're over on seeking alpha right here shows everything that you need to know They have been increasing their dividends for the last 59 years that shows that there's very stable dividend company and Down here at dividend frequency. They pay out their dividends every single quarter So for example, they're gonna pay out their dividends on four times of year compared to another company like AG and C They're gonna pay out their dividends monthly That means they're gonna pay out their dividends 12 times a year. So let's switch back over to coca-cola So coca-cola has a dividend year of 2.7 percent That means if you own one share of coca-cola the actual payout will be over the course of a full year is a dollar and 76 cents So that's around 44 cents every quarter that you receive from coca-cola Now, this is the ex-dividend date that you guys will pay attention to 3 14 2022 That's when you will buy your shares And then on 3 15 2022 you'll be able to sell your shares now in theory. It sounds like a perfect situation You buy coca-cola on the 14th. You sell it on the 15th And then you move on to the next company on the 15th and then the 16th So throughout the time you'll do this But investors already know guys that the 44 cents dividends that's calculated in They the price doesn't always drop but it usually drops around that same percentage of um 44 cents over the next day doesn't always happen But in theory, um investors already have that calculated in the market already have that calculated in That's why sometimes during dividend dates you see people that do option plays do not do option plays When dividend dates are coming up or when earnings are coming up. All right, so let's take a quick look at yahoo finance This is coca-cola. Let's look at the historical data and as you guys can see right here The last one was on 3 14 So the open right here was 57. This one you would have bought at 57 97 cents And then the next day it actually went up So you would have made a decent amount of profit you would have got your dividends And you would have sold the next day for a profit now Let's go back to that previous dividend date right here. Um, you would have bought it for 53 60 And then over the next day it actually dropped way more than just 42 cents So now you would have bought it for 53 60 on the 30th and then sold it the next day for 52 98 Uh, and then even throughout the day it dropped all the way down to 51 90 If you would have thought that it would have recovered. That's what I'm saying a lot of times it actually Um, it's already calculated in and the price usually drops over the next Um day when it comes to dividend farming. So you have actually lost a lot of money That month. So you would have lost a lot of money on the 30th, but you would have made a little bit of it back On the 14th. So that's how it usually goes. So let's just go back one more on the 14th You would have bought at 55 92 and then on the 15th you would have sold it at 55 68 So you would have made the the tiniest the slightest bit of profit Um dividend farming that quarter that quarter on coca-cola So let's take a quick look at another one agency that have an ex dividend day of 428 pay out 12 12 cents every single month. They have an ex dividend day of 428 2022 That means you could buy it on the 28 set it on the 29th. Um, they have a They pay out 12 cents per every single month. So that's around a dollar and 44 cents every single year And they have a dividend year of 12.42 percent agency is right now at $11 and 59 cents So let's pull up agency This is a completely different company in a completely different sector than coca-cola So let's take a look if this actually happens with them as well There it goes 12 cents. You would about on 13 41 next day 13 30 Um 12 93 next day 12 89 Slight profit right there because that's not a 12 sit difference 14 70 14 72 14 cent profit um for 15 28 15 11 who you would have lost a lot of money that um quarter I mean you would have lost a money that month dividend chasing um 15 86 15 76 That's one cent not really worth your time And then this one 16 20 the next day is 15 85 you will have lost a significant amount of money Trying to dividend form agency in coca-cola. All right, so for you guys to stay to the end of this video Let me tell you the real reason why dividend farming uh in this manner would not work It sounds great in theory. You might get lucky every now and then but in the long term Selling shares that you did not own for over one year would be Considered short term capital gain and you are completely taxed different in short term capital gain because you do not own shares of a company For longer than a year if you own it longer than a year You could consider it long term capital gains But anything less than a year is short term capital gains And you are taxed at a completely different tax bracket than in long term capital gains So even if you had a success rate of let's say You dividend form five companies a month and all of those five companies you want three times a month for the entire year But that short term capital gain even on dividends and from holding these companies For just one day all of that short term capital gain You are going to be taxed at a rate that is going to completely wipe out the dividends that you earned that year So that's why many dividend investors will buy good quality stocks at a discount when the market is pulling back I'm going to show you guys how to do that in the next video So make sure you subscribe to this channel so you don't miss out on any future videos But we buy good quality dividend stocks at a discounted rate And then we hold on to those companies for over a year Five years six years and we reinvest our dividends to where we're going to be able to retire And those dividends so if you guys want to learn how to retire and dividends Make sure that you scroll down to the comment section that link is to my patreon the patreon would take it to my discord Inside the discord. I post every single time I buy and sell stocks all of my dividend plays I post all my swing trades and technical analysis in there We also have professional option traders and a great community of traders in there with a whole bunch of knowledge All at the tips of your fingers They post that option plays every single day inside of the discord So if you guys are trying to rather be swing traders Dividend investors are option traders. The discord is the place to go So if you guys want to check that out that link will be down in the comment section But yeah guys, that's it. Let me know what you think down in the comment section Have you been chasing dividends just because of that dividend yield? Have you been buying dividends just to collect it and to sell in it the next day? Let me know what you think about that strategy. Am I completely wrong? Let me know down in the comment section if if there's another way to do this to where you actually would become profitable Please let me know down in the comment section Or if there's something that you thought about doing but wasn't really sure on why people Isn't doing it they sales and you thought you had the big brain idea first. Let me know Everything down in the comment section. I'll be sure to check those out But other than that guys make sure that you pick up your free stocks from weebel On block five and also moomoo all those opportunities are great right now in order to boost start Your investing journey with some free stocks and some free cryptocurrency But other than that guys, i'm zeke bring you to dream green show and i'm out. Peace