During the depths of the financial crisis, in 2009, I found myself unemployed, in debt, and miserable. But I wasn’t about to give up. No. I took action.
So I moved all the way from Michigan to Florida for better job prospects, a nicer climate for car-free life, and to save on state income taxes.
I showed up to a place every day until they finally gave me a job, started an online side hustle, sold my car, saved more than half of my income, and invested in high-quality dividend growth stocks.
Six years later, at 33 years old, I reached financial freedom. I now live off of the safe, growing passive dividend income my investments generate for me.
Dividends didn’t just change my life. Dividends saved my life. Now, there’s so much to love about this stuff. I mean, how can you not love waking up to fresh money you didn’t go to sleep with?
But there are a few things about this that I particularly enjoy. Today, I want to tell you about three of my favorite things about dividends. Ready? Let’s dig in.
The #1 thing I love about dividends is their passivity.
There are many forms of passive income out there. But I don’t know of anything with the passivity of dividends.
Rental properties? Online businesses? Nope. And nope. Collecting a dividend requires literally no action on your part. It can’t possibly get any more passive. Once you own stock in a high-quality company paying safe, growing dividends, you’re done.
There’s no 1-800 number to call. No quota to fill or paperwork to fill out. There’s no action to take whatsoever.
The dividends from your investments will just flow into your brokerage account, almost like magic. It’s wonderful.
In all of my years of investing, and owning shares in more than 100 companies, not once have I ever been bothered by a company.
It’s not like Johnson & Johnson is going to call me and ask me to come fix a production line issue or something. Tim Cook from Apple isn’t calling me up and asking me my opinion on a new iPhone design. There’s absolutely zero effort on my part here. Not a single calorie expended on collecting thousands of dollars in dividends every month.
No. I just sit back and collect dividends while I go about my life and do the things I like to do.
It really doesn’t get any easier or better than that. And since I save so much energy on collecting the income necessary to cover my bills in life, that frees me up to really engage in all of the things I thoroughly enjoy doing. Like exercise, reading, creating content, traveling, etc. It’s difficult to have the energy to, say, work out six days/week, like I do, if you’re busy working for 50 hours/week. The passivity of dividends totally frees me up mentally and physically.
The #2 thing I love about dividends is that I get to have my cake and eat it, too.
I get to produce a high amount of income from my stocks, and I get to keep my stocks. It’s the best of both worlds.
If you own a stock that pays no dividend, how do you produce income from that stock? Let’s say you’ve built up a seven-figure portfolio of stocks. And none pay a dividend. How are you going to live off of that portfolio? How do you get income?
Well, you generally have to sell stocks. That’s how.
It’s just the same as owning an index fund that has a super low yield. If you want more income than the yield of the fund provides, you’ll have to sell off chunks of the fund in order to get more income. And what kind of risk does that entail? Well, it introduces the risk that, one day, you potentially run out of holdings in that fund to sell.
I look at each stock in my portfolio as a golden goose that’s laying ever-more golden eggs.
I live off of these golden eggs. The pile of eggs from each golden goose gets bigger and bigger over time. Which is great. Because life gets more and more expensive, and I need more eggs over time. Meanwhile, the golden geese? Yeah, they get fatter and happier over time. It’s a virtuous circle where I leave the geese be and let them produce more bountiful eggs for me to live off of. And the more eggs I get, the less likely I am to have to slaughter a goose for money. Everyone’s happy. A win-win.
Why would I want to play with calculators, safe withdrawal rates, and guesswork when I have decades of life to look forward to?
Some people buy low-yield index funds and then try to calculate how much of their holdings they’ll have to sell off each year in order to produce enough income to live off of, but at the same time trying to prevent running out of money one day. The problem is that it’s a delicate balancing act. You don’t know how long you’ll live. And you don’t know the rate of return on your future investments. It’s all guesswork. Dividends aren’t guesswork, though. It’s safe, growing, real cash money I can use to pay my real cash bills. And I get to keep those stocks holdings intact. Love it.
#3? Dividends are geographically independent.
You don’t need to be in any one geographic location to collect dividends. You can live off of them from anywhere in the world.
Try that neat trick with almost any other form of income. You certainly don’t get this geographic freedom with a job. And even with some other forms of passive income, like rental income, it isn’t necessarily super easy to manage that from anywhere on the planet.
I live in Thailand. And guess what? My dividend income hits my accounts and spends just the same as if I were still in the States.
Dividends are a problem-free, location independent source of income that can let you live anywhere your heart desires. I don’t need to be in any one place to collect my dividends. I can be anywhere in the world.
One of the best things about being financially independent is also being geographically independent.
See, a job tethers you to a location. Whether you like that location or not. Even with all of this so-called remote work and work-from-home stuff, a lot of workers are suddenly finding out that they need to come into the office more than they thought.
But there is no office for dividends. There’s no dividend headquarters.
My 100+ companies continue to send me my dividends with no questions asked about what I’m doing or where I’m doing it. Dividends offer true freedom. It’s freedom from a job, freedom from expending effort, freedom from spending any time on accumulating the money, and freedom from having to be in any one place. You’re free to do what you want, when you want, where you want, why you want, with whom you want. That’s the kind of freedom I have in my life. And I hope I’m inspiring you to achieve the same level of freedom in your life.
— Jason Fieber
P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.
Source: DividendsAndIncome.comWe’re Putting $2,000 / Month into These Stocks
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