Thursday, January 18, 2018

Dividend Growth Investing

I wanted to share with you why I chose Dividend growth investing as my investment strategy. To be honest I have known about dividends when I first started investing in 2012, but never thought of them as an investment strategy. It started with my brother telling me about a blog called "Dividend Mantra" now "Mr free at 33"

He explained that there was this guy that was going to retire early just by collecting dividends from dividend stock companies. Now, I wasn't sure what to think so I looked up the blogs and started researching the strategy. It wasn't a get rich quick scheme, but rather through diligent saving and investing, one could achieve financial freedom and retire early. 

This is exactly what I was looking for. I knew that getting rich quick was a very tough task and opted for a long term strategy instead. 

Dividend growth investing checked off all the boxes. 

There is no certainties in life, but dividends are the closest thing. It seemed so simple... Why not invest in a company who has a proven track record of paying and increasing dividends for 10, 20, 30+ years? 

The great thing about these high quality dividend growth stocks is that no matter what they are going to pay you a dividend. Its hard choosing a stock and hoping that the price will go up as your only source of profit. Dividend stocks will provide me with a steady stream of income even if the price never goes up!

This makes them much less risky than some company no one has ever heard of that may or may not develop the next gen technology that your friend told you about. 

The other great thing about dividend growth stocks is that I don't have to sell the stock in retirement. You may often hear about the 4% withdrawal rule in retirement. Well I don't want to withdraw or sell any of my stocks. If I'm making x amount of money from dividends I will just keep the stock and continue to collect the paychecks!

Now dividend growth investing isn't for everyone and there are always pros and cons to each side, but it has worked for me so far. When you buy into a great company like Johnson and Johnson (JNJ) or Proctor and Gamble (PG) you just have to sit back and collect the growing dividends. 

The proof is in the pudding and you can see my dividend history and how well it has worked for me. I'm set to receive about $4,000 in dividends this year and that will bring my total dividends received close to $10,000! 

I've only been doing this for 3.5 years and feel so happy to have achieved these numbers. All it takes is diligent saving and investing. Anyone can do this


Let me know why you chose dividend growth investing or why you went another route!
 

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