I know you are busy and you will appreciate that I go straight to the point:
“You will become a better investor within a single month with this book”
Back in 2011, I wrote an introductory book about dividend investing. You were 26,439 investors to download and read it. You were many to send me comments and questions in regards to this first essay to help you in your investing journey. Based on your feedback, I’ve went back to my drawing board and wrote a complete new book.
Why Dividend Investing?
We will explore together the reasons why I’ve selected dividend growth investing as my privileged investing strategy. You will also be able to follow my investing principles and build your own investing process.
You could choose to go for hunting for penny stocks. Finding the next big thing and making astronomical profits from time to time. I know what I’m talking about; I built my $50,000 down payment for my first house with this strategy. The problem is that it’s very time demanding and sooner or later, you take a hit with a bad trade. With regards to that, I know what I’m talking about as well.
You could choose a coach potato approach by selecting only a few ETFs and rebalancing your portfolio every 6 months or annually. This would save you a lot of time and would probably provide some great returns. But it’s boring and I feel like investing like this seems like it is just another chore in life. Should I wash the dishes or rebalance my portfolio tonight? I might as well fill in my tax returns for a really crazy night! Hahaha!
If you are relatively new to investing, I think I still have to convince you a little bit more. So here’s what you need to know about Dividend Investing before we start the real process…
#1: Dividend Investing Returns are Huge
You will read about several academic researches covering the topic of dividend growth investing. They end-up all with the similar song: dividend payments are an important part of the stock market return.
Over the past 28 years, 50% of the stock market return was produced by dividends. Dividend stocks maintain a more stable value over time (meaning less stress for investors) while producing a constant cash flow that is more than sufficient to cover the rate of inflation.
Source: Ycharts
#2 Dividend Investing is Easy to Understand
A prestigious financial background is not required to pick solid dividend stocks. There are easy to understand and accessible key ratios to use in order to build your dividend investing model. You don’t need to read thousands of investing books to understand the main concept of dividend growth. In fact, simply by using an investing newsletter such as my Dividend Stocks Rock platform, you will be able to manage your portfolio by your own.
#3 Dividend Investing Protects Your Investments From Inflation
If you pick solid dividend stocks with constant dividend growth, your investments will be protected from inflation by the dividend payout. If the dividend growth is superior to the rate of inflation (roughly 2%), your assets will grow faster than your cost of living. Look at how 3M Co (MMM) dividend raised compared to the US inflation over the past 10 years:
source: ycharts
Strong dividend growth stocks will automatically protect your lifestyle from inflation. For once, there is something easy in the financial world!
#4 Dividend Investing is a Great Way To Create Passive Income
Once you have purchased your shares, you will automatically receive dividend payments. It’s a great way to create a passive income where you don’t need to actually work to earn money. Since portfolio management doesn’t require much time with this investment strategy, you can definitely call it passive income.
#5 An 8% Dividend Yield Portfolio is Attainable
Due to the power of dividend growth, you can double and triple your dividend yield base on your cost of purchase (COP). For example, you buy company X at $100 and it pays $5 dividend per year. Your dividend yield is 5%. 5 years later, the dividend payout is now $8 and the stock rose to $130. Your dividend yield based on your COP becomes 8% while the current dividend yield is 6.15%. Therefore, if you hold your stocks long enough, you can earn up to a double-digit dividend yield on your COP.
#6 Easy Sell Signals
There are a few easy sell signals on dividends stocks. When there is a dividend cut, a high dividend payout ratio or no dividend growth for a few years, it’s time to sell your stock and look for another investment. We will cover the topic of buying and selling later, but for now, you can assume selling dividend stocks is easy. I also have a great trick for you later on.
#7 The Power of Compound Interest
Each time a company increases its dividend, you benefit from the power of compound interest. Therefore, a 5% dividend increase every year becomes a lot more. For example, if a company pays a $1 dividend per year and increase its dividend by 6% each year, the company will be paying a $2 dividend in only 12 years.
#8 You Can Start Investing With As Low as $1,000
You don’t need to be a millionaire to invest in dividend stocks. Many online brokers will accept your application with $0 investment. Then, you can easily purchase your first shares with roughly $1,000 in hand. If you setup a SIP, you should reach this amount in no time. Your account will increase slowly but will surely grow with dividend payouts and additional savings.
30 days to dividend growth investing
My book went from 40 some pages to a 135-pages master class book. I’ve designed the book so you can read 1 chapter a day for 30 days and become a better investor within a month. Here’s brief resume of what you will find inside:
General Investing Days #1-8
If you have been investing for a while, this section will seem “too beginner like” or redundant. I strongly suggest you read it anyway. This is the foundation of any investing process. Since we don’t start building a house with its rooftops, we need to start at the basic with the money we invest.
Dividend Growth Investing Days #9-18
The second portion of this book aimed at dividend growth investing. You will discover more about the power of this strategy and why it is likely the most effective way to invest your money. I will also share my own stock selection process.
Portfolio Management Days #19-30
This section answers the eternal struggle of buying and selling your stocks. You will learn to manage your portfolio, how to optimize follow-up and find out about a made easy method to buy and sell your holdings at the right time.
Ready to invest?
If you are serious about improving your investing skills or you are starting as a beginner investors, check out this book and learn from a decade of experience in the stock market.
