Today marks the seventh year of me posting on Dividend Growth Investor website. I have posted different things on the site, but the overall theme has been to discuss investments, investment strategies, and thoughts on how to improve my dividend investing. The goal at the beginning, and right now and in the future is to build a portfolio of sustainable dividend growth stocks, which will produce enough in dividend income to cover my expenses every month. This is financial independence in a nutshell.
So why do I keep writing about dividend investing to the tune of seven consecutive years?
1) Make myself do the work to form an opinion. When you write things down, it is much easier to focus your thoughts and examine your thesis.
2) Share experiences and connect with like-minded individuals
3) Pass it forward – there is so much misinformation on internet about investing – I wanted to pass it forward and share the knowledge with others, same way I learned in the first place.
The thing that attracted me to dividend investing is that fact that I realized I would need a consistent return if I wanted to rely exclusively on investment income in FI/Retirement. When I earn dividends, I am reasonably certain about the amount and timing of dividend payments generated from my diversified portfolio. Hence I was instantly hooked once I learned about Dividend Growth Investing. However, I never really discussed that I had spent previously 9 years searching for the perfect strategy that delivers consistent returns to live off a nest egg. In the process, I found 100 ways of how NOT to make money, and only one of how to make money consistently - Dividend Growth Investing.
I don't mean to shamelessly self-promote myself but the truth my friends is that there are only two bloggers who have been writing continuously about dividend investing and documenting their strategy for over 7 years. That includes myself, and my friend Dividends4life. While the number of dividend investing sites has mushroomed, I have also witnessed the death of tens of other sites dedicated to dividend investing. Few have the dedication, patience and willingness to work hard for extended periods of time in setting up an income stream whose biggest fruits will be generated years down the road. Also, having the discipline to stick to one strategy, and not abandon it altogether are the cornerstones of investment success. Too bad few investors realize that they should find a strategy that works for them in realizing their own investment goals and objectives, while taking into consideration their knowledge and actual tolerance to pain. I know for a fact that when I start deviating too much from my strategy, I make mistakes. Hence, discipline has been key for my success toward potentially achieving my goals.
I believe that the skills that helped me continue writing my site for seven years are the same skills that have helped become successful as a dividend investor. With dividend investing, success is all about saving as much money as possible, and then investing that money in quality blue chip dividend growth stocks available at attractive valuations. The dividends generated by those companies are then plowed back into shares of more dividend paying companies, which pay more dividends on their part that gets put to use into more dividend paying companies etc. You get the picture.
The other item of equal importance is the fact that I was willing to sit through thick and thin on most of my investments, without selling too quickly. I say most, because I have done the mistake of thinking I was smart and trying to outsmart everyone else by replacing one company for another. In 9 out of 10 cases, I would have been better off simply doing nothing. Patience is an essential skill in dividend investing, and the need to act at all times is actually counterproductive. Successful dividend investing requires patience.
I have built my portfolio with quality dividend paying companies, which I will be happy to hold even if they closed the stock market for 10 years. In fact, in the event that I die or became incapacitated, my portfolio could simply exist in its current form, and just spit out dividends every month to the person/entity that gets ownership to it. That person could be your one year old kid/nephew/niece or your 90 year old grandma who doesn’t know the difference between preferred stock and livestock. I won’t go as far as saying that your cat or dog will be fine if they inherited that portfolio to live off the dividends however, because this in my opinion is plain crazy. But then, who am I to tell you what to do with your money?
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