I love the smell of dividends in the morning.
Dividend growth investing has been incredibly rewarding for me over the last seven years.
Now, I could say it’s been incredibly rewarding to me because I’ve gone from below broke to controlling a portfolio worth over $300,000, with a large chunk of that value generated from the snowball effect of the compounding of dividend growth investing.
However, I don’t plan on selling stock to fund my expenses. So the value of the portfolio doesn’t mean very much to me on a day-to-day basis. It just isn’t particularly relevant other than to provide a frame of reference.
It’s instead the passive income the portfolio generates on my behalf that affects my lifestyle to a great degree.
And has it ever affected me!
While I already know the portfolio is on pace to generate more than $11,000 in dividend income over the next 12 months, which provides me with enough income to cover a significant portion of my core personal expenses, I want to express the power of dividend growth investing in a new way today.
So I thought I’d take a look at just how rewarding dividend growth investing has been to me over the last seven years by showing my total dividend income earned since I first started investing in high-quality dividend growth stocks back in the summer of 2010.
Are you ready?
Let’s do this!
I’m going to tally things up on a year-by-year basis, before showing the cumulative dividend income earned since 2010.
- 2010: $269.33
- 2011: $1,202.06
- 2012: 2,602.58
- 2013: 3,926.12
- 2014: $5,631.60
- 2015: $7,503.01
- 2016: $10,616.40
- 2017: $3,462.57 (thus far)
If we add these numbers up, we get a cumulative total of $35,213.67.
That’s over $35,000, folks! For doing practically nothing!
I mean, just think about that. What could you do with an extra $35,000?
We’re talking a full-time year’s worth of work here for many people. In my pocket. For simply holding shares in wonderful businesses that earn a healthy and growing profit and return part of that healthy and growing profit directly to their shareholders via growing dividends.
Better yet, I’ve been reinvesting this money all the way along, which buys more shares, adding to the future dividend income the portfolio will be able to generate.
If I had never started dividend growth investing, this number would be zero. I would have nothing to show for all those days I woke up, worked hard, created value for the world, and went to bed tired. It would almost be like all of it never happened. What would it all be for if there wasn’t something to show for it?
Instead, I look at dividend growth investing as a way to create a permanent legacy for oneself.
I like to say that dividends are the “proof in the pudding”. Dividends are the “show-me” of investing. I don’t want a company to tell me how profitable they are; I want them to show me via real-life cash money in my hand. If a company is routinely growing its profit, shareholders – the real owners of any publicly traded company – deserve their piece of that growing profit pie.
Well, I think a dividend growth portfolio – and dividend income a portfolio can/will generate – is the “proof in the pudding” for an individual to look on with proud reflection. It’s proof of hard work. It’s proof that the hard work was worth it. It’s proof that you were there, in the trenches, doing what was necessary to provide lasting financial freedom for you and your family. It’s proof that money can work for you rather than that relationship always being the other way around.
And this legacy can be anything you make of it.
But it’s a source of income that will likely increasingly reward you for the rest of your life.
That means your legacy only grows. The pride swells. The opportunities expand.
Indeed, I’ve earned $35,000 in completely passive income over the last seven years. But it’s very likely that number will exceed $100,000 over the next seven years. The following seven years? Well, it just becomes superfluous.
This is essentially an extra full-time income over the last seven years. It was basically a third job, seeing as how I was already working 50-60 hours at a car dealership and also blogging/writing for another 40 or so hours per week over most of this period.
I worked hard. I scrimped. I made tough choices. I ate ramen noodles for a year straight. I was tired and sore at times.
But I never lost confidence that everything would work out.
Even back in 2011, I knew there was a me that existed in 2017 that would be waking up mid-morning, smiling at all the hard work the me of then was currently putting in in order to create the lasting legacy and passive income to afford that future me the opportunities and freedom I knew I had to have in order to live a life maximized and customized for happiness.
Well, I woke up at 10:30 this morning. And I smiled while the idea of this article came to me. All of that hard work was not in vain.
So keep in mind that there’s a future you out there. This future you can be anything you want him/her to be. But don’t put in hard work without something to show for it. If you create a legacy for your future self, the opportunities could be endless. And that legacy can grow, faster than your future self will grow. It can outgrow you and outlive you, leaving behind a permanent mark on this world. If that’s not worth working for, I don’t know what is.
Have you added up your cumulative dividend income over a certain time frame? Is it to your expectations? Do you think you’ve created a lasting legacy for yourself and those you care about?
Thanks for reading.
Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net.