- 1). Contact several large no-load mutual fund companies and request prospectuses for their dividend stock funds. Most large mutual fund families offer at least one or two funds that specialize in high dividend stocks.
- 2). Log on to your brokerage account if you have one, and use the firm's stock screening tools to filter stocks according to their dividend yield. Most stock screening tools allow you to set a minimum dividend yield and filter stocks based on that criteria. If you do not have a brokerage account, you can find the same information by reviewing the stock tables in the "Wall Street Journal" or "Barrons", but the process will take longer.
- 3). Open an IRA account, and use that account to purchase the high-dividend mutual funds and individual stocks you wish to buy. Using an IRA to make the purchase shields the dividends you accumulate from current taxation and allows the money to grow tax free until you withdraw it in retirement.
- 4). Contact the firm that administers your 401k plan if you have one. Ask if there is a dividend stock fund available. Many mutual fund families, banks, insurance companies and other 401k administrators offer several funds that specialize in stocks that pay high dividends. Using your 401k to invest in such funds provides a tax shelter and protects those profits all the way until retirement.
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