“I’m 73 years old and can’t afford to retire… are marijuana stocks the answer to early retirement?”

Dear DTA,

I am 73 years old and know nothing about stocks or penny stocks. We only have social security still working cannot afford to retire trying to retire in about one to two years so we can enjoy retirement I need your help to show me what to do I have a brokerage account set up at Charles Schwab.

I have only about half a day a week to work on this I need your help when to buy and when to sell do you think marijuana stock is the answer to retire early please advise.

-Anonymous

Thanks for writing in! You and I have something in common: we both know nothing about penny stocks. Well, I’m bending the truth a little bit there on my part. I do know a little bit about penny stocks.

But it’s in the same way that I know a little bit about playing the lottery. That’s because buying penny stocks is, in my view, a lot like buying lottery tickets.

Maybe you’ll make it big. But maybe you’ll lose all or most of your money.

All in all, the odds don’t seem to be in your favor.

This is why I write about and personally invest in high-quality dividend growth stocks. Dividend growth stocks are stocks that represent equity in businesses that have track records of routinely increasing their dividends.

A company can generally only pay out increasing dividends to shareholders if it can also routinely increase its profit. After all, a dividend is a cash payment to shareholders. If a company isn’t producing that cash, it can’t very well continue handing out ever-more cash for very long.

By investing this way, I’ve amassed a six-figure portfolio that generates five-figure dividend income.

I didn’t start saving and investing until I was in my late 20s. Yet I was able to quit my job in my early 30s (I recommend you read my “blueprint” for early retirement). So incredible change can indeed happen fairly quickly.

This five-figure dividend income is completely passive.

That means I log into my brokerage account (just like your Charles Schwab account), only to regularly see fresh cash deposited there.

It’s the easiest job I’ve ever had.

However, your predicament is that you’re much older than I am.

And you don’t have much time; two years isn’t very long to build up a sizable investment account that could produce significant passive income on your behalf.

That said, it sounds like you have multiple income sources.

Some of that income could be put to work, which could start to generate some passive income for you fairly quickly, giving you more flexibility and freedom within a couple years.

You have your Social Security payments. And you’ve implied that you both (you and your significant other) have jobs.

The key is to create a gap between all of that income and your expenses.

If you’re living at or above your means, you’ll never build up the excess capital that could be put to work, which thus jeopardizes your future freedom.

So you need to start living below your means. Immediately.

That means cutting out what you don’t need. Cut out whatever doesn’t add value to your life. Because you two will need to have an honest conversation about what adds more value – the things and bills in your life, or more freedom and flexibility so that you can stop working soon.

Based on your question, I think you already know the answer to that.

Once you’re able to start socking away some of your income, you’ll want to start putting it to work.

Since you have little time to spend on all of this, you’ll want to automate it as much as possible.

The good news is that if you’re able to cut your expenses, drop your bills, and simply your life, you’ll probably find you have even more time in your life. Keeping up with a number of bills is in and of itself quite time consuming.

That said, try to automate.

That means setting up your remaining bills for some type of auto-pay system. Use an online budget aggregator, like Mint. That’ll make budgeting and tracking all of your money relatively easy. And then just let the capital start to build up.

When you’re ready to start investing your money, keep it very simple.

I like to invest in what I know.

I like business models that are easy to understand. If you concentrate on easy-to-understand business models, this will cut down on the amount of time you need to research potential investments.

Moreover, with your age and limited time horizon, focusing on stocks with higher yields (and lower growth rates) probably makes more sense than investing in low-yielding stocks (with higher growth rates). That’s because you’re interested in using the investment income fairly soon (in about two years).

Each Sunday, I routinely cover higher-yielding dividend growth stocks that appear to be good long-term investment candidates.

Stocks that might qualify for your income needs, based on yield alone, include AT&T Inc. (T), Verizon Communications Inc. (VZ), Southern Co. (SO), and Duke Energy Corp. (DUK).

These are businesses that are easy to understand.

Think telecommunications (phones) and media (television) for the first two.

Think electric utilities (that which powers your home) for the second two.

All four of these stocks yield more than 4% right now.

That’s much higher than what the overall stock market yields.

And it’s certainly much more than what your savings account will pay.

Better yet, all four of these stocks are dividend growth stocks, meaning their dividends are growing year in and year out.

Thus, it’s pretty likely that all four of these stocks are going to pay you even more money this time next year.

Now, I’m not recommending you go out and buy these four specific stocks.

I’m rather just giving you some idea of what’s possible.

With only two years, you’re going to be limited. I won’t lie to you.

But that isn’t to say that nothing can be done.

If you start saving and investing today, you might be shocked at just how much progress can be made in a fairly short period of time. I’m proof of that.

I wish you luck and success.

Jason Fieber

Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.