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Dividend Growth Investing Works for Everyone

Key is putting in the time and sticking to a plan

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If you are a 50 – 60 something year old, you still need to plan at least for a 20 – 30 year retirement. As a result, focusing on a stream of income that maintains purchasing power and is sustainable should be more important than chasing the highest yield available. For a 30 something year old, you have a slightly longer period to focus on, but you should still make your investments in a way that translates into a sustainable and growing stream of dividend income for decades. For both scenarios, income investors would likely see a $1000 purchase of a stock like Exxon Mobil (XOM) as a source of $30 in annual dividend checks that will grow at or above the rate of inflation. Assuming a 7% annual growth, this income likely will double every decade.

In both age group scenarios, you are interested in purchasing assets that can provide you and your heirs with a growing and sustainable stream of income for decades to come. I am getting my inspiration behind this thesis after looking at trust funds set up to benefit people, their children and grandchildren and favorite non-profits. You never know in advance whether the 50 year old will live 50 more years, or whether the 20 year old would die in 10 years. This is why your strategy for each age group might be remarkably similar.

Of course, the fruits of dividend investing are going to go those who take the time to study it patiently, devote time to better their skill over time and effort, and build expertise over time. Just like compound interest, knowledge does accumulate over time. And, as you build you knowledge and your portfolio over time, it blends into a powerful symbiosis that turbocharges your potential. This is because as you gain scale in your investments over time through patience, smart work, perseverance and a little dose of luck, you will be able to devote more time to your investment interests. In other words, if you manage to retire using dividend investing, then you would have the time to learn more about it.

In summary, I do not think it should matter to you who I am, where I live, what my background is, or how much money I have (or make). The thing that matters is that I have a desire to follow a dividend retirement strategy, and consistently save and invest in income producing securities until the income from these investments is enough for me to retire on. This type of thinking could be applied to everyone that wishes to attain financial independence using dividend investing. My goal is not to make everyone a clone of my DGI strategy, but to provide readers with the analytical tools, frameworks and models, that would provide them with the foundation behind their future success. If you have the tools of the trade, you can paint your own masterpiece. If you choose to focus on irrelevant facts however, and draw wrong conclusions, then you will not be really helping yourself out in your investing journey.

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