Are You Looking For Financial Security? Here’s How to Get Started.

Dear DTA,

I want financial security.

-Kristen S. 

Great to hear from you, Kristen. Thanks for taking the time to write in. And thank you for your readership.

We want our readers to know that we deeply care about their financial futures, which is why we share so much high-value content.

Your goal is obviously one that most people have.

We all want financial security, more or less.

But what exactly is financial security?

Well, I’d define financial security as financial independence.

When you have independence, you have security. When you no longer have to depend on anyone – a boss, a significant other, a parent – for any financial help, you’re secure.

I set out for this same goal in 2010.

Broke and fresh off of losing my job during the depths of the financial crisis, I was determined to better myself, my finances, and my security. I never, ever wanted to be in such dire financial straits again.

Well, I claimed financial security six years later, at age 33.

I quit my job in the process.

And I now live abroad as a dividend expat, with my passive dividend income covering my basic expenses in life, rendering me financially independent and secure.

My financial security allows me to spend my time on passions that make me happy.

The great thing about this whole thing is that you, too, can achieve financial freedom!

All I did was stop spending money on a bunch of stuff that didn’t really make me happy or add to my quality of life.

I did nothing complicated. Everything I did is available to everyone else.

Too often, we spend money we don’t have on stuff we don’t need.

I simply stopped doing that.

But we can’t just put our savings in the bank where it’s going to earn nothing, especially after factoring in inflation.

Once you take a hard look at your lifestyle and cut out the unnecessary fat, you’re going to develop savings.

And it’s at that point that you’ll have to decide how to invest that capital so that you can supercharge your results through the power of compounding.

There are a lot of ways to go about accomplishing this.

But after a lot of research, I came across the dividend growth investing strategy.

This investment strategy essentially involves buying stocks that pay increasing dividends. These increasing dividends are funded by the growing profit the underlying businesses are generating.

It’s an investment strategy that intuitively makes sense. 

You want to invest in great companies over the long run.

Well, a lengthy track record of growing dividend payments serves as a pretty good initial litmus test for company quality, as it’s nigh impossible to run a bad business while simultaneously paying out an ever-larger dividend to your shareholders.

And in order to become financially independent, you need to generate enough passive income to cover your expenses so that you never need to have a job again.

Growing dividends are about as good as it gets when talking about passive investment income. 

There’s no selling off the very assets you worked so hard to accumulate. No need to worry about stock market fluctuations.

You simply rely on great businesses to go about doing what they do best, which results in them paying you your ever-larger dividends.

And there’s no work involved in collecting (and spending) growing dividends. Nobody to call. No paperwork to fill out.

The dividends just show up in your brokerage account on the payable date.

It literally cannot get any easier.

And so I took my excess capital – the savings – and invested it in high-quality dividend growth stocks like those you’ll find on David Fish’s Dividend Champions, Contenders, and Challengers list.

Mr. Fish’s list has invaluable information on more than 800 US-listed stocks that have all increased their dividends each year for at least the last five consecutive years.

Perusing this list will reveal many of the world’s best businesses. These are often world-class enterprises.

That’s why it shouldn’t be a surprise that many high-quality dividend growth stocks are also blue-chip stocks.

I’ll throw some names out there…

Johnson & Johnson (JNJ). There’s Exxon Mobil Corp. (XOM). And you’ll also see 3M Co. (MMM).

These are some of the best businesses int the world. And these are companies that have been paying and increasing dividends for decades on end.

You can see how well this strategy has worked for me by checking out my FIRE Fund, which is my real-life and real-money dividend growth stock portfolio.

This portfolio generates the five-figure and growing passive dividend income I need to be financially secure.

So I said that I did nothing complicated.

However, while the path I took was very simple on paper, it’s difficult to actually execute the necessary steps day after day in real life.

Fortunately, we’re here to help you all the way long.

Before you actually get to investing your savings, though, reading through the series of dividend growth investing lessons put together by fellow contributor Dave Van Knapp would be a great way to educate yourself on all the nuances of this strategy, as well as how to successfully implement it.

And then when you finally find yourself ready and comfortable to invest your hard-earned capital, I helm a series that, every Sunday, highlights a compelling dividend growth stock for long-term investment.

It’s the Undervalued Dividend Growth Stock of the Week series.

This series drills down into some of the best stocks out there.

Every idea is presented based on merits that include the business model, fundamentals, qualitative aspects, and the valuation.

So you have some tools to help you attain your goals, Kristen.

But it’s ultimately up to you to take the necessary steps.

There’s no better time than today to start your journey toward financial security.

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.

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