Most people have, at one point in their lives, dreamed or thought about being rich, and all the benefits being rich would bring. Yet most people don’t really have to become rich as one of their investment goals, they rather are interested in saving money for their retirement, or they plan to supplement their salary via dividend income.

Yet, surprisingly, becoming relatively wealthy via dividend growth investing is not impossible at all.

Getting Wealthy – Easier Than Most Would Assume

It is not easy to define an absolute level of wealth at which point an investor is wealthy or rich. Much depends on circumstances such as the place of residence, the number of family members that need to be supported with one’s income or assets, etc.

One definition of being rich is that one’s assets are large enough to cover one’s living expenses until the end of one’s life – you don’t ever have to work again (yet may choose to continue to work). Hitting this level of wealth, again, depends on several variables, including the standard of living one is aiming for.

Getting to that level of wealth is not easy, yet a lot easier than most people would think. It does not take extremely large earnings to get to this level of wealth, as long as one follows several principles:

• One has to start saving as early as possible, as the investments one makes can compound for a longer period of time.
• One has to save regularly, and preferably a high portion of one’s income (pay yourself first).
• One should invest into assets that have a good chance of compounding at an attractive rate.
• All proceeds from one’s investments should be reinvested.

How Dividend Growth Investing Can Make You Wealthy

Dividend growth stocks, such as the Dividend Aristocrats or Dividend Kings, have historically generated highly compelling total returns – higher ones than the broad equity markets (e.g. the S&P 500), with less volatility and lower drawdowns on top of that.

Investing into dividend growth stocks also has other advantages: Investing into stocks is easy, as there is a lot of information available. The minimum investment amounts are not overly large, thus one can start investing early – that is not possible for asset classes such as real estate, where high down payments are required. Transaction costs are relatively low, and reinvesting proceeds from one’s assets (dividends) is very easy. It is possible to automate dividend reinvesting through so-called DRIP programs in many cases.

For investors who are starting out early on in their lives, and who have set a goal of becoming wealthy at one point, dividend growth investing thus is a very viable way of getting to their goal. A diversified income portfolio, with lower-risk stocks that provide attractive dividend yields and that have a history of raising their payouts regularly, is highly achievable and can get investors very far on their road towards becoming wealthy.

Final Thoughts

Becoming wealthy during one’s lifetime, either for the freedom of not having to work any longer or for the feeling that one will be financially secure through retirement, is a goal that investors should have. With the right strategy, it is achievable, and it will be beneficial for one’s life. Dividend growth investing can be a great way to get one towards this goal, if done correctly. Dividend growth stocks allow for diversification, attractive total returns, easy reinvestment, and transaction costs are low.