The dividend snowball is an investing strategy that can help you build passive income. Financial literacy can be tricky to learn, but this video will show you how the dividend snowball works and what it could do for your future! Higher yields are associated with higher returns over time. Interest rates have been at record lows since 2008. This is bad news for people who invest in bonds with coupons tied to interest rates, but it's good news for companies that pay dividends. Since dividend investors want a high yield, they typically buy shares with high dividends and low growth potential (low P/E ratio). So even though earnings have been growing at 11% per year over the last 5 years, it's been hard for companies to keep increasing their earnings by the same amount as interest rates drop. So many investors like high dividend stocks even though the growth prospects aren't the best. Another reason why dividends outperform: They cause investors to stay invested! As we all know, emotions and psychology will play a factor in what we do with our money. According to these findings, "the average investor turnover rate of S&P 500 stocks is around 90%. Investors sell after periods of weak performance and buy after periods of strong performance." This means that they're essentially buying high and selling low; they don't have a good sense of timing. The best financial education is to understand your own money. I’ll show you how and why in upcoming videos, and share the most important things you need to know about personal finance. Be sure to like and subscribe to my channel: https://www.youtube.com/channel/UCylh3_lD-DfCKCZTRoDRSzw?sub_confirmation=1!! DISCLAIMER: I’m not a financial adviser. These videos are for educational purposes only. No official financial advice is being given. Please - always check with a professional before making any investments or financial decisions. Your investments are your sole responsibility, these videos merely share my own opinions with no guarantee of gain or losses. A FAIR-USE COPYRIGHT DISCLAIMER Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, commenting, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statutes that might otherwise be infringing. Non-profit, educational, or personal use tips the balance in favor of fair use.