Dear DTA,
I don’t really know anything about stocks. But I will start to educate myself immediately. I would love for my husband and I to be able to retire form making the right investments!
-Samantha J.
Hi there, Samantha.
It’s great to hear from readers like yourself. Thanks for putting yourself out there and contacting us.
The most important word in your entire email is: “educate”.
I can’t stress that enough.
It’s vital that you educate yourself in all matters investing before you actually put your capital to work.
Knowledge is power. And you want to be as knowledgeable and powerful as you can be.
But you have the right attitude. You’ve admitted you don’t know anything. More importantly, you’re willing to learn.
That’s so much better than many other people, where they instead act like they know a lot (but really don’t). This is how people get in trouble and lose money.
Now, there’s no way this short letter back to you will come even close to educating you in all matters investing. In fact, I’ll barely scratch the surface here.
I’m instead aiming to quickly give you some basic but very valuable information on how and why I’ve gone about successfully investing, which could be a foundation upon which you build your house of knowledge by expanding your investing education.
And before this article is done, I’ll point you in the direction of further reading.
First, I’ll discuss the how I’ve personally gone about investing in an incredibly successful manner.
Just for some background real quick, keep in mind that I was almost 28 years old and completely broke as recently as mid-2010.
Actually, scratch what I said about “completely broke”.
Since my liabilities were greater than my assets, I was below broke.
However, I decided to turn my financial life completely around.
I was just like you at this time. I didn’t know much about investing.
But I was okay admitting that. And I was more than willing to learn.
After spending a great deal of time educating myself, I came to realize that dividend growth investing is arguably the best long-term investment strategy of all.
And it became clear to me that this strategy would be the investment strategy I’d use to dig myself out of my hole, build wealth, generate passive income, and become financially independent at a relatively early age.
This investment strategy essentially involves buying shares in high-quality businesses that have longstanding track records of paying their shareholders rising dividend payments.
These regularly increasing dividend payments are funded by the growing profit and cash flow these businesses are generating over time.
After all, why invest in a business that isn’t able to grow?
And why invest in a business that isn’t sharing that growth directly with its shareholders (who collectively own a publicly traded company)?
As you might imagine, many of the highest-quality dividend growth stocks out there are also blue-chip stocks.
These are stocks that can build generational wealth, delivering growing passive income all along the way. And this growing passive income can fund a retirement, giving one the passive income they need to pay their bills without working.
Fortunately, one doesn’t have to guess at which stocks are dividend growth stocks.
A prominent member of the investment community, David Fish, has compiled data on more than 800 US-listed stocks that have raised dividends for at least the last five consecutive years.
This data can be found on David Fish’s Dividend Champions, Contenders, and Challengers list.
Now that you see the how, you can probably already see where I’m going with the why.
It’s a strategy that intuitively makes sense. But it’s also a very practical, tactical, and tangible investment strategy.
Most everyone out there who invests has a very simple overarching goal: investors want to generate enough investment income to pay their bills.
Well, dividend growth investing is built for this, as the passive and growing dividend income high-quality dividend growth stocks pay out can be easily and directly lined up against expenses, making it easy to track progress and eventually pay real-life bills with real-life investment income.
But I don’t just talk the talk. I walk the walk.
You can see my real-money and real-life dividend growth stock portfolio for proof.
This portfolio was built the old-fashioned way: a lot of hard work, saving, and regular investing.
But the hard work paid off, as this portfolio now generates the five-figure passive and growing dividend income I need to pay my bills, rendering me financially independent in my 30s.
And remember what I noted earlier. I was below broke just a few years ago.
Yet here I am now.
If you’re interested in allowing this powerful long-term investment strategy to work for you, too, your education can begin right now.
Fellow contributor Dave Van Knapp has put together an excellent and in-depth series of articles that explain just exactly what dividend growth investing is all about, why it can work for just about anyone, and how to successfully implement it.
If/when you’re ready to put capital to work, we’ve also got you covered.
That’s because, each week, I personally highlight a compelling long-term dividend growth investment idea via the Undervalued Dividend Growth Stock of the Week series.
This series discusses what appears to be an undervalued high-quality dividend growth stock every Sunday.
These are some of my best ideas at the time of publication. And I tend to invest my own hard-earned capital into many of these same stocks. So I’m on the same page as the readers.
Samantha, this article is in no way designed to totally educate you on everything that is involved with investing.
Instead, think of this as an exciting primer.
It would now behoove you to continue your education so that you can start to put your capital to work and get you and your husband closer to retirement.
There’s no time like the present.
I wish you luck and success.
Jason Fieber
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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.