I routinely discuss at length the benefits of investing in dividend growth stocks.
These are the types of stocks you’ll find on David Fish’s Dividend Champions, Contenders, and Challengers list.
Every stock on Mr. Fish’s list has increased its dividend for at least the last five consecutive years, with over one hundred of them sporting 25 or more consecutive years of dividend increases.[ad#Google Adsense 336×280-IA]There are many reasons I focus on these stocks.
But the dividend raises themselves tell you a lot about a company’s ability to not only profit, but routinely and consistently increase profits.
After all, you can’t increase dividends for two or three or more decades in a row without driving the kind of profit growth necessary to sustain those payouts.
And not only does it tell you something almost instantly about a company’s ability to generate increasing profits, but it tells you a lot about how seriously it takes its shareholders.
After all, it’s one thing to tell shareholders how much cash flow the business is generating. It’s quite another to show shareholders and actually write those checks. You just can’t fake cash.
But I don’t just talk the talk. I also walk the walk.
I personally invest all of my hard-earned cash into dividend growth stocks.
And today I’m going to give you “the goods”.
In short, I’m going to reveal the details of my real-life six-figure portfolio… so you can see for yourself that I’m putting my hard-earned money where my mouth is.
Let’s get started…
In the table below you’ll find my personal portfolio.
I’m so confident in these stocks that I’m betting my early retirement on them…
Of course, my portfolio isn’t perfect, as no portfolio is.
In fact, I’m still in the asset accumulation phase, so it changes from month to month – generally increasing in size.
But this is the portfolio I’ve been painstakingly and lovingly building over the last five years.
And it’s growing larger and larger every single month, paying me more and more dividends as time marches on.
I basically started with nothing and I’ve been contributing to it with capital funded from my day job (now writing for a living) where I make approximately $50,000 per year. Living well below my means and buying quality companies at attractive long-term valuations is my motto.
Another thing you may notice is the diversification between businesses and sectors.
Spreading nearly $200,000 over 65 businesses means that I don’t rely on any one company for an overwhelming percentage of my dividend income. You can see all the major economic sectors represented here. I own a percentage of companies ranging from banks to missile manufacturers to beverage makers.
In other words, this portfolio gives me ownership stakes in a diverse set of businesses out there from which to receive passive income.
There’s something else to consider too…
Whereas most ordinary citizens rely on one source of income (their job) to fund their lifestyle and meet their expenses, I have over 65 sources of income: 65 dividend growth stocks, plus my income from writing which is diverse itself.
Talk about sleeping well at night!
I call my portfolio the “Freedom Fund” because I’m counting on it to give me the freedom to pursue interests other than full-time work by the time I’m 40.
I think that’s possible because I’ll have ownership stakes in some of the best businesses in the world, and each and every one of them will be paying me dividends that increase year after year, allowing my purchasing power to keep up with inflation.
I realize that’s just seven short years from now (I’m currently 33), but this is entirely possible when you consider the very nature of the kinds of stocks I’m simply buying and holding.
Not only could they continue to offer ever-growing streams of income, but at the same time they could offer me less risk than most “normal” stocks due to a variety of reasons.
First, I’m receiving some of my initial investment back with every dividend I collect, thus reducing the capital I have at risk one quarter or month at a time.
Second, most of the businesses I invest in have been around for decades. Some have been around since the 1800s. They have enduring staying power because they sell products and/or services that are ubiquitous.
Third, the stocks themselves tend to oscillate less than the broader market due to their low beta.
Nothing is a 100% sure bet in life, but I’m willing to bet my early retirement on these stocks. And I’m documenting my journey all along the way – for better or worse. Will I fail? Possible, but I doubt it. I think the odds are much better that I’ll be living off of my rising dividend income in eight years, free to pursue life on my terms.
Follow along and let’s see how it works out!
– Jason Fieber, Dividend Mantra[ad#DTA-10%]