How to Make a Passive Income from Dividend Stocks

• What Warren Buffett recommends is you buy a company with a competitive advantage over other companies. For example, he bought Apple stock 8 years ago. This is known for being a high-quality brand better than other smartphones, computers, smart watches, tablets, etc.
• customers buy more of their products & over the long term, they’re going to sell more & make more profit. Apple has a competitive advantage with its brand name.
• Coca-Cola is another example of a stock with an advantage. Buffett bought Coke way back in 1988. He made a careful observation whilst walking that there were more Coke lids than any other lid out there & consumers just couldn’t get enough of their product.
• He saw that Coke had a clear advantage over other drinks in terms of taste & marketing. So, he bought heavily into the stock.

What is happening to their Revenue?

Are they Growing?

Are they Expanding?

Are they generating more Money?

• These are important questions to ask. What you can do is type in the stock that you’re looking at on Google, for example, we’ll do Apple stock, Apple’s stock history. Click on the Macrotrends website. It gives you the past revenue.
• Revenue that is growing consistently is a good sign.
• The consistent growth of net profit is a good sign of a great company. Over the last decade or so growing profit means the company is doing a great job of making money for its shareholders. You can see that each company’s profit same as above. Just type Apple stock net profit macro trends.

• As Charlie Munger says, you want managers with integrity & talent. To find out if they have these qualities you need to be watching their interviews & read what they write in things like annual reports.

Are they being honest?

Are they consistent?

Do they know their business inside out?

• It’s good to read & watch as much as you can about them, so you can get a feel if you want them to manage your business.