I’d like to retire with a moderate income so that I can travel and live comfortably.
It’s so nice to hear from our readers.
Thanks for taking the time to write in. And thank you for your readership.
You have an admirable goal.
I say that with full confidence because I once had a very similar goal.
And I went from below broke at 27 years old to financially independent and retired early at 33 by believing in that goal and giving it all I had.
You can see how that journey played out by reading my Early Retirement Blueprint – a step-by-step guide that can help just about anyone reach their early retirement dreams.
I’m not totally sure what a “moderate” amount of income is for you. We all have different lifestyle expectations and perspectives.
But I’m going to share with you some resources that, in my opinion, can help you achieve at least a moderate amount of passive income in a relatively short period of time.
You first have to master the practice of living below your means.
There’s a famous saying.
It goes like this…
You need money to make money.
You can’t invest what you don’t have. And you can’t create passive income without investing.
This might, at first, sound difficult.
But it’s really not.
I worked at a very middle-class job on my way to financial independence and early retirement. I don’t have a college degree. And I started off flat broke.
But I lived below my means by wanting freedom more than stuff.
I then invested my savings.
And I built my FIRE Fund in the process.
That’s my real-life and real-money stock portfolio.
And it generates the five-figure and growing passive dividend income I need to cover my basic bills in life.
Of course, once you’re able to live below your means and save some money, you need to invest that in order to build your wealth and create passive income.
While it’s smart to have some money set aside for emergencies (via a savings account, etc.), you should intelligently invest the bulk of your savings. That’s because inflation will slowly erode your capital and eat away at your savings if you don’t make money with your money.
This is where compounding comes in.
Compounding is a wonderful machine.
See, money works 24/7. It doesn’t breathe, sleep, or tire. It’s relentless.
Plus, money is a replicating machine. It duplicates itself. And it gets better at this – duplicating itself at a faster rate – the more it does so.
And you want to put yourself in a position where your money works for you, so you don’t have to!
Now, there are a lot of ways to go about investing.
But I can tell you the strategy I’ve chosen for myself is dividend growth investing.
It’s a simple and straightforward investment strategy that basically involves buying up shares in wonderful businesses that are so prodigious at producing profit (i.e., they end up with more than they can reasonably use), they share that profit with their shareholders.
And as the profit grows, so does the money they’re sharing with shareholders.
That sharing process usually occurs via cash dividend payments.
What’s better than cash dividend payments?
Growing cash dividend payments, of course.
If you’re able to generate enough growing dividend income, you can do whatever you wish.
That means retire. That means travel. That means live comfortably. That means almost anything. The world is your oyster.
For more on how to go about getting started with dividend growth investing, definitely check out fellow contributor Dave Van Knapp’s Dividend Growth Investing Lessons.
These articles serve to guide novice and experienced investors alike on what the strategy is, why it works, and how to implement it.
You might be wondering by now what dividend growth stocks actually look like in real life.
Well, wonder no more.
The Dividend Champions, Contenders, and Challengers list is the most robust source of information on dividend growth stocks I know of, containing the names of and information on almost 900 US-listed stocks that have raised their dividends each year for at least the last five consecutive years.
After doing an analysis that incorporates scrutinizing fundamentals, competitive advantages, risks, and valuation, I present a high-quality dividend growth stock that appears to be undervalued at the time of writing and research.
Those ideas are shared via the Undervalued Dividend Growth Stock of the Week series.
There’s a lot to read through here, Denise.
But if you’re as excited about this stuff as I was (and still am), I know you’ll voraciously consume this content and get started.
There’s no time like today to start that journey toward a more comfortable life that involves some of your travel dreams.
I wish you luck and success.
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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.