Dear DTA,

I’m looking to retire a little early. I’m 59 years old. I’ve dabbled in the markets and made some progress, but I don’t have tens of thousands of dollars to invest and lose.

-Rudolph W.

Hi, Rudolph. Thanks so much for writing in. And thank you for your readership.

Your question is one that I think most people can relate to. It resonates with almost anyone, as nobody likes to lose money.

You can count me in on that one, too. I’m no more interested than anyone else in throwing away good, hard-earned money.

And that’s exactly why I invest the way I do.

The strategy I use is not only perfectly suited for me, but I think it’s also suited quite well for your own situation.

That investment strategy is dividend growth investing.

As I discuss in my Early Retirement Blueprint, this strategy has literally changed my life. And it allowed me to retire from my career decades before most people could ever dream of.

Specifically, I buy high-quality dividend dividend growth stocks at appealing valuations. I hold most stocks for a very, very long period of time. I then sit back and collect the dividends, upon which time I can choose to reinvest or pay my bills.

It sounds simple, right?

Well, that’s because it is!

Investing doesn’t have to be complicated. In fact, more complicated investment strategies tend to make an investor more poor.

The simpler, the better. 

The proof is in the pudding, Rudolph.

First, there’s my proof.

I started off worse than broke just a few years ago. By worse than broke, I mean my net worth was below $0 – I was below broke.

But I went from below broke to financially independent in about six years, building the bulk of the six-figure dividend growth stock portfolio I now own and control.

That portfolio – a real-life and real-money portfolio – generates about $1,000 per month in growing passive dividend income I need to cover my expenses in life.

I did nothing complicated.

I basically stuck to buying up dividend growth stocks like those you’ll find on David Fish’s Dividend Champions, Contenders, and Challengers list – an invaluable list of more than 800 US-listed stocks that have raised their dividends each year for at least the last five consecutive years.

See, here’s where you get more proof in the pudding.

These businesses have a lengthy track record of paying increasing dividends to their shareholders.

They’re able to do that because they’re simultaneously recording increasing profit, which generally comes about when they’re selling more products and/or more services to more people all over the world.

The dividend is the “proof” in the “profit pudding”. 

Don’t let a company tell you that profit is growing. Make them show it to you.

They say actions speak louder than words.

Well, a dividend payment is one of the best actions I can think of toward the end of proving the business is doing well.

And if that dividend payment is growing year after year like clockwork, it shows you a lot about the underlying health and growth of the business.

Just imagine what kind of business you’d have to run in order to write those ever-larger checks for years – or decades – on end. You have to do a lot of things right in order to make sure those checks can be written and cashed.

This expectation puts a lot of pressure on the business and management to perform and succeed.

Conversely, a company that doesn’t have that expectation has a lot of leeway. They just don’t have to really perform at the same level. No rising dividend payment to worry about gives management plenty of room to poorly allocate capital or otherwise perform inadequately. There’s a lot of room for error.

As you might expect by now, many high-quality dividend growth stocks are world-class enterprises.

Think Microsoft Corp. (MSFT). Think Coca-Cola Co. (KO). Think AT&T Inc. (T).

These are products and/or services that quite literally make the world go round.

It’s ubiquity.

Try to go a day without seeing a cell phone, personal computer, or Coke product.

And that ubiquity more or less translates into rising dividend payments when one has a broadly diversified portfolio of high-quality dividend growth stocks.

Believe, me, you’ll want your dividend payments to be ubiquitous!

You don’t have tens of thousands of dollars to lose. I don’t think anyone does.

Dividend growth investing is wonderful because the risk is fairly low.

You can go out and buy bitcoin. Or buy some penny stock. Then see how well you sleep at night. See how safe your capital really is.

Or you can go out and buy stock in a blue-chip company that pays you to own it. You’ll probably sleep like a baby.

This is just a short primer, Rudolph.

But we have many more resources available that are designed to help you.

For example, I personally highlight a compelling long-term dividend growth stock idea every Sunday through the Undervalued Dividend Growth Stock of the Week series.

And if any of these concepts are foreign at all to you, fellow contributor Dave Van Knapp produced a fantastic series of “lessons” on dividend growth investing that serves to educate both novice and experienced investors alike on what the strategy is, how it works, and how you can successfully implement it.

Once you’re ready invest, you may want to check out my Top 10 Stocks for 2018 piece, which is a great list of high-quality dividend growth stocks to consider for 2018 – and beyond.

There’s no better day than today to start saving and investing for your future.

And I can’t think of a better long-term investment strategy than dividend growth investing.

Combining haste with intelligent investing should serve you well, Rudolph.

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.