Dear DTA,
I’m trying to learn about investing. I want to do it right. But there’s so much information out there. I really don’t know what’s right and what’s not. Help.
-Jenny D.
Hi, Jenny.
Thanks for writing in. We appreciate your readership very much. And it’s always great to hear from our readers.
I totally understand where you’re coming from.
The Internet is a wonderful invention. It’s allowed many of us to radically improve our quality of life and knowledge base. The sum of humanity’s knowledge is at your fingertips, at all times.
While that’s fantastic, it’s also overwhelming.
And there’s so much noise out there. Much of this noise is contradictory in nature.
That’s because we’re all different.
It’s hard to pin down any one topic and say this is “right” and that is “wrong”.
Life is rarely that black and white.
The same goes for investing.
That said, we can look at and take advantage of certain strategies that are proven to be better than others.
I’ll provide you with some ideas on one particular strategy. My ideas are backed by years of experience and success.
This isn’t theoretical hyperbole. I’m talking about real-life money.
The strategy I advocate for is dividend growth investing.
This investment strategy is so simple to execute, yet it’s so effective at building sustainable long-term wealth and passive income.
Fellow contributor Dave Van Knapp wrote a phenomenal series of articles that aim to teach DGI to anyone, from the ground up.
Those articles make up the Dividend Growth Investing Lessons.
They’re is the A-Z of DGI.
This is the strategy I used to go from below broke at 27 years old to financially free at 33.
I lay out exactly how that happened in my Early Retirement Blueprint.
So what’s DGI all about?
Well, it’s essentially a strategy that promotes buying and holding shares in high-quality businesses that pay their shareholders reliable and increasing cash dividend payments.
Sounds simple?
That’s because it is.
However, simple doesn’t mean easy.
Something can be simple to understand and also difficult to execute.
Living below your means, saving up money, and regularly investing that money into high-quality dividend growth stocks can be hard. If getting rich were easy, everyone would do it.
But if you’re looking to cut right through the noise, this strategy is a proven path to riches.
I’ve built my real-life and real-money FIRE Fund by using this strategy.
That portfolio of high-quality dividend growth stocks generates the five-figure and growing passive dividend income that allowed me to retire in my early 30s.
I’m not the only one using this strategy.
Ever heard of Warren Buffett?
I hope you have. He’s a mega-billionaire who’s arguably the most successful investor of all time.
Well, check this out.
Buffett regularly buys dividend growth stocks.
These are the same stocks I buy. The same stocks you can buy.
The $200 billion common stock portfolio that Buffett manages is chock-full of high-quality dividend growth stocks.
I realized something a few years back, when I first started studying successful investors like Buffett.
If it can work for someone like Warren Buffett, with billions of dollars, it can work for me and my thousands of dollars.
The best single resource I know of for finding dividend growth stocks is the Dividend Champions, Contenders, and Challengers list.
It contains invaluable information on more than 800 US-listed stocks that have raised their dividends each year for at least the last five consecutive years.
It’s a list that I’ve repeatedly referred to whenever I’ve been looking for great long-term investments.
This list condenses everything down into only those companies that have lengthy track records of paying their shareholders growing cash dividend payments.
After all, not every company out there can actually pay growing dividends. Some companies don’t earn a profit at all. And some companies just can’t seem to responsibly manage their cash flow.
A lengthy track record of growing cash dividend payments is a great initial litmus test for business quality.
It shows prudence.
And these dividends are an excellent source of passive income. They can pay bills just as well as a paycheck from a job can.
Actually, I’d say they can pay bills much better, because the income is coming in without any work on your part!
The above resources can help you cut through the fog and get right to the helpful information.
But we take it a step further than that, by providing actionable ideas.
I personally highlight a compelling long-term dividend growth stock investment idea every Sunday.
These ideas are shared free of charge via the Undervalued Dividend Growth Stock of the Week series.
Once you’re ready to put capital to work, these are free high-quality ideas that have been thoroughly vetted.
You can’t go wrong with reading through these pieces.
I hope these ideas have helped.
There’s a lot of noise out there. I know how you feel. But these concepts and resources have helped me go from broke and clueless to financially free – all in only a few years.
And I truly believe they can help almost everyone else out there do the same.
But it’s ultimately up to you to make the moves necessary to put yourself in a better financial position.
There’s no better time than right now to start.
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.