“I’m 68 and have been a mechanic all my life. My goal is to try to supplement my retirement income. Any good advice about investing in bitcoin?”

Dear DTA,

I have been a mechanic all of my life. At 68 years old, my goal is to try to supplement my retirement income with dividend paying stocks in order to allow my “extra” money to work for me. I appreciate any help or advice I can get from you guys. Is there any good advice about investing in the “bitcoin” that may revolutionize the financial world? Thanks again.

-Walt R.

Hey, Walt. Thanks so much for taking the time to write in. We appreciate all of our readers. As a token of gratitude, I’m taking the time today to see what I can do to help you.

We have something in common. We both have experience in the auto industry.

[ad#Google Adsense 336×280-IA]I was a service advisor for eight years, working for a variety of import dealerships.

I’m sure you’re familiar with the advisors up front, writing repair orders, putting together estimates, recommending service, etc.

The job paid fairly well (I was on pace to make $60k or so my last year), but it’s brutal in a lot of ways.

You probably know all about that.

Fortunately, I was able to “retire” from this career three years ago.

And I’ve shared how almost anyone can save, invest, and potentially retire early via my “early retirement blueprint”.

While you’re not necessarily in a position to retire early in life (due to your age), that doesn’t mean you can’t set yourself up for a comfortable retirement that could last decades.

However, I’m not sure bitcoin is the answer for you.

Investing in bitcoin involves understanding cryptocurrency and the blockchain.

Moreover, it’s extremely risky and volatile. Although you’re still relatively young, it could take more time than you have to make up a serious loss on investment.

Plus, there’s no reasonable measure known that can estimate the value of bitcoin.

What’s a bitcoin worth?

I don’t think anybody knows the answer to that question.

If you were to invest in bitcoin, keeping it as a very small portion of your portfolio would be prudent.

But the more sensible move might be to avoid bitcoin altogether.

The good news is that you don’t need bitcoin to get that “extra money” working for you.

In fact, generating extra income is surprisingly simple and straightforward.

It sounds like you already know at least a little about this, judging by your interest in dividend stocks.

The investment strategy I personally chose to grow my wealth and passive income – which was decided on after substantial research into investing – is dividend growth investing.

Dividend growth investing simply involves buying shares of great businesses that directly share their growing profit with shareholders in the form of growing dividends.

Dividends are really just a portion of the profit a business generates. And its shareholders’ right to share in the spoils.

Like I said, simple and straightforward.

You can see how this strategy has treated me over the last seven years by checking out my real-life, real-money dividend growth stock portfolio, which just so happens to generate five-figure dividend income for me.

You’ll see many household names in that portfolio.

The Coca-Cola Co. (KO) is in there. Apple Inc. (AAPL), too. Exxon Mobil Corporation (XOM), as well.

You don’t need to understand how cryptocurrency works in order to invest in these companies.

Understanding Coca-Cola means you know some basics about non-alcoholic beverages (which you probably consume regularly). Apple sells millions of iPhones every week, which you’ll likely see attached to most people’s hands and ears. And Exxon Mobil produces energy products that makes modern society work.

These are just a few examples, but you can find more than 800 US-listed dividend growth stocks by checking out David Fish’s Dividend Champions, Contenders, and Challengers list.

Most high-quality dividend growth stocks are also blue-chip stocks.

These are businesses that are relatively easy to understand. And they’re selling products and/or services to millions of people all over the world. Not just that, they’re routinely selling more products and/or services, meaning more profit, which then gets shared with shareholders via increasing dividends.

Well, those increasing dividends can indeed serve as an excellent source of additional income.

Furthermore, dividends are completely passive, making them one of the best sources of income of all. You don’t need to replace a set of brake pads in order to get paid, which is just fantastic. Furthermore, you don’t need to sell off assets (or bitcoin) in order to generate your income. Dividends just flow… like a cascading waterfall of cash.

If you diversify your portfolio properly, the income should only move in one general direction over time: up. You can see that my portfolio is filled with over 100 of the best businesses in the world.

When you’re broadly diversified (sectors, industries, etc.), even a dividend cut or two shouldn’t have a major impact on your aggregate income, due to the growth of dividend income from the rest of the businesses in your portfolio.

Dividend growth stocks, unlike bitcoin, can also be valued to a reasonable degree.

A resource that’s available right here on the site can help in that regard. Put together by fellow contributor Dave Van Knapp, his valuation guide is part of a series of lessons on dividend growth investing that can help any investor – novice and advanced alike – understand exactly how dividend growth investing works.

In addition, I actually write a weekly series that covers an undervalued dividend growth stock every Sunday, providing actionable and valuable long-term investment ideas to readers like yourself.

Now, I don’t know how much extra passive income you’re looking for. And I don’t know exactly how much “extra money” you’ll be investing.

But I can tell you that I was in your industry. I used my day job at the car dealership to go from below broke at 27 years old to financially free at 33 years old. So I can say from firsthand experience that it’s not impossible to generate significant extra passive income in a fairly short period of time, even on a salary that’s well below six figures.

However, you have to get started today, Walt.

Time is the ally of the long-term investor. So you want to put time on your side as soon as possible.

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.