The Dividend Strategy
The Goal Is To Reach financial Freedom Using Dividends To Cover your Living Expenses.
You need a steady stream of income with left over capital to invest every month or a large sum of capital upfront.
You need to know your financial freedom date which will be based on the amount of left over income you have to invest!
The Dividend Strategy Historically Has Been The Most Successful Investment Strategy & Any One Can Do It
- Figure out your financial freedom date with a compound interest calculator You need to know how much to put away a month to reach your goals for example if you invest $500 a month at a 10% market average rate of return you will have $1,000,000 in 30 years!
- Figure out your risk tolerance level simply meaning would you be more comfortable investing in safe individual dividend paying stocks or safe broad market index funds, perhaps both!
- Now for the dividend strategy to work it presumes you can get a 4-5% dividend yield off the market, This means for every $500,000 invested your dividends could pay out $25,000 annually! When the dividend income crosses your living expenses your now financially free!
Why I Love The Dividend Investing Strategy
Let's presume you worked really hard all year and you managed to save $10,000 in a year and invested it at a 4% dividend yield, That's the equivalent of 1.20 every day for the rest of your life invested correctly!
The equivalent of a free coffee everyday for life, if you won that on a radio station I bet you would be excited but let's take this one step further. The equity or the "shares you own" can go up in value like real estate, imagine having a savings account that grows well it pays you!
Lets say your able to save $25,000 at 4% that would be $1,000 annually or the equivalent of a free vacation every year for ever!
I know it sounds like a lot of money to save but keep in mind your buying passive income or the equivalent of time for your future! The day you start saving you also start getting paid!