Readers regularly ask me this.

Well, there's two parts.

First, you can reinvest your dividends using a Dividend Reinvestment Plan (DRIP) - or called scrip dividend and without paying brokerage fees. This is a convenient way to accumulate more of the same shares at a discount.

What I like about DRIP is it takes away the emotional fear of investing.

Not many of us have the guts to re-deploy dividends into the market. It's normal. So this works well if you don't want to time the market. It forces you to reinvest your dividends, which will guarantee to put your money to work - whether the market is up or down.

Dividend investing is really about investing in high-quality dividend stocks and doing almost nothing. DRIP compounds your dividends every year, accumulating your wealth over the long term.

But… here’s what I do with my dividends

If you ask me, I actually collect dividends as cash.

Dividend investing gives me the power to allocate my capital. Warren Buffett built Berkshire Hathaway to be a monster dividend machine.

That's right, Berkshire Hathaway pumps dividends to Warren Buffett.

I know, Warren Buffett doesn't pay a single dollar of dividends to shareholders - except once in 1967.

But Berkshire Hathaway's biggest holdings like Bank of America, Coca-Cola, Kraft Heinz, Apple, American Express, are actually dividend-paying stocks.