Dear DTA,
I want to survive retirement without having to live with my kids or on the street. I have never invested in stocks, but I’m looking to get into them to help me survive retirement.
-Anthony M.
Hi, Anthony.
It’s always great to hear from our readers. Thanks so much for writing in.
We certainly don’t want to see anyone live out on the street. That’s not good at all.
So let’s see what we can do to put you in a better position moving forward.
You say you’ve never invested in stocks.
Well, that needs to change. Today.
Stocks are the best asset class out there.
It’s quite simple, really.
High-quality US-based stocks are one of the best wealth producers ever known to man.
If you can build a diversified portfolio full of high-quality businesses, you’re setting yourself up for a very nice financial future.
Now, I was never living on the street, but I can tell you that I was once looking at a very bleak financial situation myself.
Back in the spring of 2009, I was fired from my job at an automotive dealership. It was the depth of the Great Recession. Not a great spot to be in.
Finding myself a broke and unemployed college dropout, I decided to turn it all around by moving across the US, getting a new job, working hard, making some key lifestyle changes, living below my means, and investing my savings into high-quality dividend growth stocks.
And the plan worked!
I actually went from broke at 27 years old to financially free at 33.
I even recounted that journey in my Early Retirement Blueprint, which is a step-by-step guide that lays out a reasonable and realistic path to early retirement for just about anyone.
Like you, Anthony, I didn’t know a thing about stocks back then. Never bought any.
But I realized I was missing out. And you clearly realize that, too.
The thing about stocks, though, is that it can all be a bit overwhelming to new investors.
With that in mind, I’m going to point you in the direction to some resources that can clear up some of the confusion.
These resources are designed to educate you a bit more on the long-term investment strategy of dividend growth investing.
This is the investment strategy I’ve personally used to dig myself out of my own hole, which allowed me to build my real-life and real-money FIRE Fund.
That portfolio generates the five-figure and growing passive dividend income I need to cover my bills and live a life blissfully free of a job.
I was missing out BIG TIME by not investing in stocks, but I did my best to make up for lost time.
The reason I’m such an advocate of dividend growth investing – besides my amazing personal experience with it – is because it’s the most rational way to approach investing.
By sticking to only buying equity in high-quality businesses that produce the growing profit necessary to sustain growing cash dividend payments to shareholders, you’re avoiding the money-losing businesses that probably won’t allow you to build lasting wealth.
And by sticking to businesses that take their shareholders seriously, evidenced by the fact that they directly share that growing profit with the shareholders via those growing cash dividend payments, you’re avoiding the businesses out there that don’t pay you your rightful, fair share of that profit.
You can see what I mean by looking over the Dividend Champions, Contenders, and Challengers list, which compiles and tracks information on more than 800 US-listed stocks that have raised their dividends each year for at least the last five consecutive years.
It should be no surprise that the list is filled with blue-chip stocks. These are world-class enterprises here.
To invest in a way that doesn’t expose you to great businesses would be silly.
Moreover, growing cash dividend payments are pretty much the best source of passive income available.
I’m on pace to collect more than $13,000 in cash dividend payments over the next 12 months, yet I don’t have to lift a finger, make a phone call, write a letter, or otherwise commit any action in order to get my money.
I’m paid just to wake up and be alive. Even I can do that!
Fellow contributor Dave Van Knapp, a fellow dividend growth investing advocate, penned an excellent series of articles that serve to educate novice and experienced investors alike on just what this strategy is, why it works so wonderfully, and how to successfully implement it in your own life.
He calls these articles his Dividend Growth Investing Lessons.
Definitely worth a read, Anthony.
Now, I’m not sure how old you are, nor am I privy to any of your personal financial information.
So I’m not sure how much capital or time you have available to dedicate toward building your own portfolio.
But I will say that you may even want to consider retiring abroad, once the time comes.
I moved to Thailand more than a year ago to live out my early retirement dreams.
And I have to say that my life is way better over here.
Geographic arbitrage is undersold, undervalued, and underappreciated.
I’m definitely not living out on the street. Quite the opposite, I rent a luxury apartment for a little over $400 per month. This place would cost 3-5 times more in the States.
Plus, I’m experiencing numerous lifestyle enhancements: a more laid-back culture, the warm year-round climate, and a healthy and delicious cuisine.
But that’s skipping ahead a bit.
Getting back to your own foray into wealth building and passive income generation, you won’t be short on investment ideas here at DTA.
I take the time every Sunday to highlight a dividend growth stock that appears to be a compelling long-term investment, based on fundamentals, competitive advantages, risks, and valuation.
Those ideas are freely shared via the Undervalued Dividend Growth Stock of the Week series.
Once you have the knowledge, comfort, and capital ready to go, you should absolutely follow this weekly series.
These are some great resources that can get you well on your way to thriving, not just surviving, in retirement.
But it’s ultimately up to you to get started, Anthony.
Take the time today to better your financial future and start building your retirement dream life.
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.