Wednesday, January 10, 2018

Profiles of Successful Dividend Investors

We all invest in dividend stocks in order to achieve financial independence. I find it very motivating to read the stories of long-term dividend investors, who started from modest beginnings and turned into multi-millionaires after decades of patiently compounding their wealth.

Back in early 2017 I posted a summary including the stories of several millionaire dividend investors:

The Most Successful Dividend Investors of all time

Another inspirational story appeared a few months ago:

This Is How This Successful Dividend Investor Turned $1,000 Into $2 Million

Yesterday, I read the story of a retired British teacher, who left a blue chip portfolio worth $9.5 million to charity at the time of his passing away in 2017. His name was Grahame Pincock, and he passed away at 90, leaving a portfolio in a trust to spend for charitable causes fighting ill health. Mr Pincock, was a principal teacher of languages before retiring.

That portfolio included massive amounts of shares in Diageo (DEO), AstraZeneca (AZN) and GlaxoSmitchkline (GSK). These are quality blue chip stocks, which have showered their owners with growing dividends for decades.

Secret Millionaire From Glasgow Leaves Millions to Charity

As is the case with most millionaire next door types, he lived a quiet unassuming life.

His neighbours were shocked to discover how much money the 'unassuming' teacher had built up. here was never any sign he was worth much money at all but he was a very academic person so he would have had everything planned out.

 Yet, he took advantage of regular savings and invested for the long-term in things he understood. The most interesting conclusion is that almost noone ever suspects that these ordinary individuals can be worth so much.

Records show he amassed 101,786 shares in drinks giant Diageo valued at £2,311,814.

He also had £216,000 of shares in pharmaceutical giants Astrazeneca and £40,000 invested in Glaxosmithkilne.

The interesting part is that Diageo (DEO) accounted for almost a third of the portfolio value, while AstraZeneca accounted for about 3% of the portfolio value. As is the case in many of these stories, we only hear bits and pieces. However, make no mistake, the end result is due to decades of saving, investing and letting the power of compounding do the heavy lifting for you. The way to make money is to investing in boring, but stable quality companies, and patiently hold on to them for decades. You make your money by investing in what you know. Active trading and portfolio turnover are a sure way to enrich your broker and tax man, but not you. This is why there are far more successful buy and hold investors, than active traders.

I wanted to share this for inspiration. Know that regular savings, regular investment, dividend reinvestment, and a long-term focus are essential for the successful compounding of wealth and income.

Good luck in your dividend investing journey!

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