In this post, I look at the benefits of the dividend investing strategy. If you follow my monthly dividend income reports, then you’ll know that I’m a big fan of this approach.
The first thing I like about dividend investing as a strategy, is that it forces us to think long term. It’s definitely not a get rich quick scheme. It involves the careful selection of companies and investing in them over a long period of time, rather than buying and selling stocks on a daily basis like a day-trader.
The second thing I like about dividend investing is that it’s a strategy that helps me stay invested during rough markets. Rather than focusing on the market value of my holdings, I use my rising level of dividend income as a measure of progress. I find this to be a strong pillar of support during the bad times.
A few months ago, I wrote about how I reached a dividend milestone in one of my investment accounts. I had crossed the $1000 in dividends a year threshold. After looking at my account a few days ago I realized that the annual dividend income is now at $1325! It has increased nearly 33% in just seven months!
This brings me to the third and final thing that I love about the dividend investing strategy: how quickly that dividend income grows. Three things come together that makes this and investment strategy on steroids.
- Investing money from my savings
- Re-investing the dividend income each quarter, and
- When companies raise their dividend payout.
All three have really given my dividend income a major boost this year, so much so that we’re on track to exceeding our annual goal of $7,500 in dividends. Now dividend investing is certainly not for everyone, but I find that it’s been working for me so far and I intend to stay the course.
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