On the Path to Financial Independence: Dividend Investing 101 - Dividend Aristocrats
Disclaimer: I do not and cannot offer investment advice. I am not a lawyer or financial adviser. This is only the options, opinions and personal thoughts of a complete stranger on the Internet, so please proceed at your own risk.
As many posters on Steemit may have realized, I am a strong proponent of financial freedom. It is my belief that within a capitalist society, in order to truly be free requires financial independence. In order to be free from coercion, an individual must have or obtain enough money to not have to work a 9-5, to not need a salary, to not be coerced into doing stuff they don't want to do. To obtain this freedom requires opportunities, and in many cases there are not many opportunity paths open. In addition to opportunity, there is also a requirement to be dedicated to the goal of achieving financial freedom. In this post I will discuss some of the ways people secure their financial independence through dividend investing.
What is the dividend aristocrats?
When investing in stocks, there are indexes, lists of high reputation stocks which have a long track record of performance. The dividend aristocrats is such a list, where in order to make it on this list, the stock must meet some minimum criteria. To make it on the dividend aristocrat list, a stock must have increased it's dividends each year for the past 25 years. The purpose of a dividend stock is to provide "lifeline" passive income for the shareholders.
Dividend stocks can pay anywhere from 2% to 10% annual yield. Usually the dividend aristocrats pay a slightly lower yield but these are also considered the lowest risk stocks in the stock market. If you have a million dollars and you want to be financially independent, it is possible to buy dividend stocks, and live off an annual yield of 4 or 5%. This is not considering the fact that you can compound your investment by reinvesting your dividend income to buy even more stocks.
Conclusion
For all who are seeking financial independence through the stock market, there is an "opportunity path" for those who are aware of the dividend aristocrats list. Using an app like RobinHood, it is very easy to purchase your first shares of a dividend aristocrat stock such as Coca Cola. And of course timing is important, and if you have enough money to wait for a stock crash, the time to buy in is when panic selling is happening. Again this is not investment advice and I recommend anyone who reads what I'm writing not to take it too seriously, as it is only how I would invest. The main point, dividend income is passive income, and passive income is coercion free income.
The beauty of being financially independent is you wont have to care about how much or how little a reward you get on a blog post. You will not have to think about money again. You don't have to live according to a "work schedule" or be a slave to the clock. And you can spend the rest of your life doing what you really love, as a free person should be able to do.
I cut my teeth in mutual funds 20 years ago by getting into the Franklin Templeton Rising Dividends fund. Back then it just sounded reasonable, only invest in stocks that have consistently increased their dividends over a number of years. The OP's advice is sound and the power of dividend reinvestment is very powerful. If the company offers a DRIP (Dividend Re-Investment PLan) and a DPP (Direct Purchase Plan), you can call your own shots with your investments for the most part.
Thanks Dana ! Sound logic is always welcome ! I listened to Russell Conwell's Acres of Diamonds literally a hundred times before I finally heard "You can do more good WITH money than without it". Now that sounds like a no brainer, but timely information comes to us in its own time (usually when we are ready to hear it). ... Like this post !
Thank You !
over 30 votes in under 5 minutes
over 45 votes in 8 minutes
How do I get on the upvoting bot list that you are on?
I guess post consistently high quality content for a couple months straight, posting frequently on a daily basis or multiple times a day? Then over time you might capture a few hundred followers, and appear on people's feeds nearly instantly, and of course some of your followers will be bots.
If your goal is to get on the radar, post more until people (and bots) know who you are.
Haha, or just call Dan :)
It doesn't work that way. Also Dan hasn't voted me up in almost a week now. The only way to be discovered is to post high quality content frequently. Eventually you get enough followers and your followers want to see what you have to say each day or the bots which also are your followers want to forward your content to whales.
Sure...
almost a WHOLE week? That is indeed tragic with the content you write and all!
Thank you so much for sharing that information.
You are on content aristocrat list, ahaha!
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So Educational Too!Thanks For Posting This On Your Blog @dana-edwards
Thanks @Dana-Edwards , I am looking forward for a stock crash and I am pretty sure it will happen within a year or two. I can't wait to buy some dividend aristocrats stocks. Do you have some other name you like besides coca-cola?
Mc Donalds is another safe bet. They wont be going anywhere and as their company becomes automated the profits could go higher which could mean higher dividend yield. This is not investment advice and I do not own these stocks, but I simply can look at the numbers to determine which stocks I would consider buying. http://www.dividend.com/dividend-stocks/services/restaurants/mcd-mcdonalds/