Dear DTA,

I’m a late bloomer. I’m 51 years old. I’m just now wanting to start investing. I really like what I see on your site. I want to be financially independent and have a comfortable retirement. Help!

-Don J.

Thanks for writing in, Don. One of the magic ingredients for financial independence is desire. You have to really want it. If you don’t truly want it, it’s unlikely to occur.

But it sounds like you have a strong desire to be financially independent so that you can comfortably enjoy retirement. So you’re off to a great start.

[ad#Google Adsense 336×280-IA]Plus, you’re still relatively young. 51 is practically the new 31 these days.

So if you’re living an otherwise healthy and prudent lifestyle, you likely have decades of living ahead of you.

Of course, that means you have to plan for that outcome, which is what we’re talking about today.

Now, I’m not sure what your entire financial picture looks like.

But it sounds like you don’t have any investments at all, meaning you’re starting from scratch.

That’s okay, as you still have some time to catch up.

I’m a great example of what can happen in a relatively short period of time.

I was in a similar situation as yourself just a few years ago.

Back in late 2009, I was completely broke. Actually, I was below broke. I had a negative net worth, meaning my liabilities exceeded my assets. I was only 27 at the time, but this is never a good situation to be in, regardless of your age.

However, I started aggressively saving and investing.

I decided that the greatest thing I could possibly own in this life is my time.

At the start of my journey, I didn’t have a lot of money. I wasn’t even sure where to start.

But I can tell you what I had plenty of: desire.

So I’ve forgone a lot of luxury goods that many of my peers might have bought, and I’ve instead saved and intelligently invested that excess capital over the last seven years.

That intelligent investing involved buying high-quality dividend growth stocks at reasonable/appealing valuations, holding these shares for the long term, and collecting/reinvesting the dividend income.

The result is a real-life, real-money six-figure portfolio chock-full of these dividend growth stocks. This portfolio generates five-figure dividend income on my behalf.

This dividend income started covering pretty much all of my core personal expenses at 33 years old, rendering me financially independent in my early 30s! (If you haven’t seen it already, I recommend checking out my “blueprint” to early retirement.)

So you can see what’s possible with plenty of desire, even over a shorter period of time.

One of the first things I did, which is what I recommend you do, is start a budget. That means I started tracking every single penny coming in and going out.

You have to know where you stand before you start moving. And you can’t go somewhere if you don’t know where you’re currently at.

The odds are pretty strong that you’re spending most or all of your money. Don’t worry. That’s okay. You’re not alone. I was doing the same right before I started down this path.

But you’ll have to get to the root of the problem(s).

What do you spend too much on? What’s really necessary? Where could you cut spending?

For example, I moved to a cheaper apartment, sold my car, and started eating ramen noodles back when I first began the journey toward financial independence.

Maybe you don’t have to be as extreme as I’ve been.

But you’ll probably have to make some tough choices in regard to spending.

In addition, you’ll absolutely want to explore the possibility of increasing your income somehow.

Maybe you can take on overtime at work. Or you could get a second job. Snagging a gig – like becoming an Uber driver – could also work. Anything that could provide you more money to save and invest.

My writing turned out to be a second job for me, and that was on top of the 50+ hours per week I was putting in at my normal day job, which was as a service advisor at a car dealership. I did nothing luxurious. And I didn’t make a ton of money. So you see what’s possible here.

But by working really hard, taking on a second job, and cutting my expenses as much as possible, I was able to routinely save more than half of my net income.

Your savings will fuel your investing, so it’s very important that you take the savings seriously.

Once you’re saving, it’s time to invest.

I’ve personally found dividend growth investing to be the best investment strategy out there, as I hinted at above.

Dividend growth investing basically involves buying shares in high-quality businesses that routinely grow profit and share that growing profit with shareholders in the form of an increasing dividend.

You’ll recognize many companies that do this.

Think The Coca-Cola Co. (KO), Johnson & Johnson (JNJ), and Apple Inc. (AAPL).

Household names here. These are blue-chip stocks. And they’re also dividend growth stocks.

Dividend growth stocks are often blue-chip stocks, and vice versa.

And that’s one aspect of the strategy that’s appealing: you have some inherent safety when investing in companies that have been around for many years, generating a ton of profit along the way. That big profit leaves a lot of room for money to be paid to shareholders (the owners of a company) directly, resulting in the growing dividend income we’re talking about here.

And the growing dividend income is, of course, a great source of completely passive income, which is what you’ll need if you want to achieve financial independence.

Better yet, these stocks tend to provide great current income, in addition to that growing income.

You’ll often see yields of 3%, 4%, and 5% from many high-profile and high-quality dividend growth stocks. That’s on top of growth rates in the upper single digits or lower double digits.

So you’re generating greater income than you could with a lot of other investments.

Plus, studies have shown that dividend payers and growers outperform the broader market, which means you’ll probably end up generating greater wealth, too.

Actionable advice for dividend growth investors isn’t hard to find.

I provide readers like yourself with plenty of long-term dividend growth stock investment ideas each week via my undervalued dividend growth stock of the week series. Every Sunday, I highlight a dividend growth stock that looks like a solid long-term investment candidate at its current valuation.

Now, assuming you want to retire at the full retirement age (per Social Security) of 67 years old, you have 16 years to save and invest your way toward financial independence and a comfortable retirement.

[ad#Google Adsense 336×280-IA]You’ve already seen what I’ve done in about seven years, so you have a lot to work with.

Putting away $500 per month and receiving a 9% compound annual rate of return on that money (approximately the same as the broader market over the long term), that could turn into ~$215,000 (factoring out taxes and inflation for the sake of brevity).

That $215,000, at a 4% yield, could generate passive dividend income on the order of $8,600 per year. That’s $716 per month.

Plus, at 67, you’ll be collecting your full Social Security retirement benefit, which itself could be given a boost if you go out and increase your income between now and then.

As it sits, the average Social Security monthly benefit for retired workers is $1,360 per month.

Adding that in with the dividend income I provided for in the example, that’s $2,076 per month in your retirement.

And this is assuming you’re able to save just $500 per month, but a strong desire should provide you the motivation and inspiration to save much more.

Nonetheless, almost $2,100 per month is a very nice chunk of change each month. It’s certainly better than what a lot of other people are working with in their retirement.

Moreover, I think you’ll find that if you really adapt this lifestyle, you’ll find that the best things in life are actually free.

Even though I could go back to my old job in the auto industry and boost my annual income by $50,000 or so per year, I choose not to because I enjoy many things that don’t cost money.

Waking up when I want. Hitting the beach. Exercising. Going for long walks.

I don’t need money for many of my favorite hobbies. But I do need time.

As such, I think you’ll find that time is one of the greatest luxuries of all.

But if you want to own your time, become financially independent, and enjoy a comfortable retirement, you have to start today.

I wish you luck and success.

Jason Fieber


Disclaimer: 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.