Tuesday, September 2, 2008

my brief dividend growth history

This article orginally appeared on The DIV-Net on August 27, 2008.

Two years ago this month I was 27 years old and I had just opened an online brokerage account with aspirations to build a portfolio for my family's future. I slowly put together a watchlist of stocks and concentrated on saving money and learning as much as I could about stocks and the market. Over time, and as I educated myself, I became naturally attracted to dividend growth investing. The characteristics of dividend growth investing which drew me in are many, and the enthusiastic authors of The DIV-Net will likely cover several of these attributes in detail.

In August of 2006 my dividend portfolio of stocks yielded less than $150/year in income. As the months went by I continued to save money regularly and buy dividend stocks when I felt that they offered good value. Many of the companies I own have raised their dividends several times since I originally bought chunks of them. By August of 2007 my yield had grown to $1,252/year, and today it sits at $2,087/year. Today I continue to view dividends as half of my journey to financial freedom. Dividends are the brushstrokes that I put on today, in creating a masterpiece for the future.

I've been through a lot as a dividend investor, but yet I've been through nothing. I'll write more about what I mean by this in next week's post.

Please visit The DIV-Net to read my follow up post September 3.


littlemoneylab said...

Hi, congrats on your dividend growth. What is your take on the dividend investing vs. Indexing Investing?
I have a ETF portfolio which the yield on cost is around 4% as well. Is the time to search for individual stocks worth it? Obviously, ETF has MER associated with it. But when the time comes to withdraw from your portfolio, one who has many different stocks in his/her portfolio has to pay large commission cost to maintain the target allocation,right? Do you have any plan to minimize that?

MG (moneygardener) said...

lml, Dividend investing and index investing are both good strategies. There are advantages and disadvantages of each. Personally I use both strategies for different portfolios. I think you need to be careful with your trading fees. A $10 commission on a holding that is worth over $15,000 is not significant though. I have not done much work on target asset allocation because I am young and my philosohpy is that I want to buy when value is present, as opposed to adding expensive stocks to diversify. If I play my cards right there will be plenty of time to diversify over the next 10 years.

Anonymous said...

who is Andy ? and where did he go in the first place?

MG (moneygardener) said...

andy is a finacially smart friend of mine. He didn't go anywhere, he just hasn't guest posted in a while.