Would you like to become financially independent and even potentially retire early? Want to live off of the completely passive income your investments generate for you? Looking for the perfect strategy to accomplish this?
I want to share with you viewers today why I chose to be a dividend growth investor. I made this decision back in early 2010, way before YouTube investing videos were all the rage. This decision was based around a clear objective. I wanted to become financially independent and retire by 40 years old. At the time I was almost 28 years old. So I gave myself about 12 years to make it happen.
Now, there are a lot of investing strategies I considered and could have used. But I ultimately saw dividend growth investing with a dividend portfolio as the best strategy to get me to the promised land. And I must say, it worked out much better than I expected. So much better, in fact, that I accomplished my goal seven years early.
That's right. I achieved financial independence at only 33 years old.
I now collect four-figure passive dividend income every single month without lifting a finger. I get paid just to exist, which is amazing. This strategy has served me well. And I believe it can serve you well, too. I want to share with you five reasons why I chose to be a dividend growth investor and why I think it's the perfect strategy for becoming financially independent and retiring early.
The first reason is perhaps the most important reason. If you're going to live off of investment income in lieu of job income, you need to make sure that income is extremely reliable.
The second reason is this: Dividends are as passive as it gets. Once you own stock in a dividend-paying company, you don't have to do anything else in order to collect that dividend in perpetuity. It's a one-and-done that you'll find almost nowhere else. I'm not saying there aren't a lot of fantastic ways to make a lot of money.
The third reason is that it forces you to invest in only the best businesses. See, a growing dividend is a litmus test for two things. First, it shows you which businesses can to pay a growing dividend. Second, it shows you which companies value their shareholders enough to share with them their fair share of growing profit.
The fourth reason is right in the name of the strategy. It's dividend investing. The "G" in DGI stands for growth. That's because those reliable costs of life I mentioned earlier are also rising. Again, expenses like shelter and food are going up all the time.
What do dividend growth stocks like Accenture, L3Harris Technologies, and Sherwin Williams all have in common? They all have a 10-year dividend growth rate that's well in excess of 10%. With inflation in the low-single-digit range, these stocks are inflation busters.
The fifth reason? Dividend growth investing tends to beat the market over the long run. However, while I'm not specifically gunning for outperformance, I definitely won't turn it down if it comes my way.
After all, reinvested dividends account for the vast majority of the S&P 500's total return over the last five decades. Between 1973 and 2020, per the aforementioned research, Dividend Growers & Initiators turned $100 into over $11,000. An equal-weighted S&P 500 turned that same $100 into less than $4,000.
I can't guarantee you the same results that I've experienced, but these five reasons clearly show you why dividend growth investing might just be the perfect long-term investing strategy, especially if you're chasing after the same goals I chased after.
Video Length: 00:08:36
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