Part 4/8:
The second reason for abandoning dividend investing stems from impatience, particularly before the dividend snowball effect becomes apparent. Many new investors experience a meager start, where dividends earned in the first year are disappointingly low. This slow growth can deter individuals from sticking to the strategy long enough to see the potential long-term benefits.
The concept of the dividend snowball emphasizes the power of compound interest. Investing consistently in dividend-paying stocks and allowing dividends to reinvest can significantly magnify returns over time. However, during the initial years, many investors utilize their limited willpower to hold their investments, becoming disheartened when they see minimal progress.