I own equity in more than 100 of the best businesses in the world.
These are businesses that sell products and/or services to consumers, other businesses, and/or governments globally.
And these companies have, in aggregate, millions of employees out there working for little ol’ me.
It’s a pretty wonderful feeling.
In essence, my money is working for me 24 hours per day, 7 days per week, 365 days per year.
Not that I’m by any means lazy (I’m one of the hardest-working people around when I’m motivated), but I am quite willing to admit that my money works harder than I ever have.
See, the great thing about money is that it can replicate itself.
The Replication Of Money
Money’s ability to essentially reproduce is my favorite thing about it. But what makes the whole process even more amazing is that money gets better at this as it grows. It becomes stronger the more it replicates.
In fact, this reminds me of the movie Multiplicity. If you haven’t seen it, it’s a movie about a guy (named Doug) who’s so busy at work, he decides to clone himself in order to spend more time with his family while simultaneously getting his work done. This experiment seemingly works out well for Doug, so he adds to his clone brood. Things go awry, however, as these clones aren’t quite up to the snuff of the main character. Moreover, it’s made even worse when a clone makes a clone, whose IQ is directly and negatively impacted by being a copy of a copy.
So in the movie, the process of replicating has negative connotations. And every time a copy makes a copy, there’s severe degradation.
But my experience with money is the complete opposite.
As money makes more money, the ability to replicate becomes even stronger due to the power of compound interest. $10 that turns into $20 has an even better chance of turning into $40. So on and so forth.
Due to the rule of 72, we know that it takes about 10 years for money to double at a 7% rate of return. But this also means you end up doubling a double. $10,000 that doubles into $20,000 over 10 years will double again, into $40,000, after 10 more years. And since money is fungible, it’s all the same. There’s no degradation.
This all said, this is all largely academic for me (though great fun). The actual value of my Full-Time Fund on any given day actually means very little to me. Other than affecting my net worth, the Fund zooming up by $3,000 or falling by $5,000 does nothing for me. In fact, I generally prefer lower stock prices in most cases, which, by extension, means I prefer the value of the Fund to also be somewhat restricted.
However, the ability for money to replicate itself shows up in the most tangible and meaningful way in regard to my growing dividend income.
I’m already set to collect almost $11,000 in dividend income over the next 12 months. That’s almost $1,000 per month, on average.
But with all of those employees out there selling products and/or services, increasing these companies’ profit and intrinsic value, the likelihood of these companies increasing their dividend payouts next year (and every year thereafter) is quite high. More profit fuels greater dividends to shareholders like me. After all, I’m pretty much solely investing in high-quality dividend growth stocks here; if a stock doesn’t have a lengthy track record of growing dividends, I’m usually not interested.
So that $11,000 will likely grow to ~$11,660 over the next 12 months, purely organically (assuming 6% dividend growth). I’m then looking at ~$12,360 the year after. It then grows to ~$13,100 after another 12 months. You get the point.
The dividend growth percentage might stay static, but the absolute income increases exponentially due to the power of compounding all the way through. That’s kind of how compounding works.
And this isn’t even factoring in the reinvestment of the growing dividends, which will only accelerate all of this.
But there’s another kicker…
A Dividend A Day
Like I mentioned earlier, I’m invested in more than 100 really great businesses. And most of these companies send out dividends quarterly. There are a few that pay monthly. And a few that pay once or twice per year.
All in all, I’m expecting to receive more than 365 individual dividend payments over the next 365 days.
We can see the math here. That’s a dividend a day!
That means every single day I wake up… I get paid!
I wake up Monday, I’m paid. I wake up Tuesday, I’m paid. I’m paid to basically exist. I’d say I’m paid to get out of bed, but that’s actually not quite true. I could stay in bed all day and still get paid.
Gives new meaning to the idea of a sick day, doesn’t it?
Now, these are all averages here. I might not necessarily collect a dividend in each individual day. Some days I might collect three or four dividends. The next day, zero. But it’s really beside the point.
The point is that I’m now in a position to where I’m collecting a dividend a day.
And a dividend a day keeps the unwanted job away.
Well, I still technically “work”, as I have a passion for writing and inspiring people.
So I spend time writing articles like the one you’re reading, as well as freelance articles that I share here. Of course, I don’t necessarily consider it work, which is why there are quotation marks above.
After all, it’s not like someone who’s able to retire in their early 30s is just going to play shuffleboard all day. And so the writing I do is something I want to do – it’s not unwanted at all, unlike my old career.
Nonetheless, the passive income I’m collecting these days covers my core personal expenses, rendering me financially free.
And since money replicates itself so wonderfully and efficiently, the gap between passive income and core personal expenses will only grow more favorably for me. That’s the snowball effect of dividend growth. This income will likely accelerate faster than my spending will, which is certainly a nice problem to have.
But collecting so many dividend payments throughout the year is an incredible indication of exactly how free and fortunate I am.
A dividend a day is this constant tangible reminder that financial freedom is real and ongoing. If there’s ever doubt or wonder, a dividend is likely either on its way or already in one of my brokerage accounts. It’s like a cash register. Ka-ching! Ka-ching! Ka-ching!
While $11,000 in dividend income spread out across more than 365 payments spends all the same as $11,000 spread across many less payments, I find comfort in the persistent flow of dividend income. It’s this ongoing gesture that’s hard to place value on. No long waiting periods between paychecks – I’m in fact paid more often now than I ever was back when I had a day job!
Moreover, I prefer broad diversification. I’d much rather collect $100 from 100 different businesses than $1,000 from 10.
Financial freedom has many benefits, of which I attempt to regularly cover here. Increased happiness, more flexibility, and the ability to be the real you are just a few ways in which financial freedom improves one’s quality of life.
But a dividend a day keeps the unwanted job away. And receiving so many dividend payments so regularly reminds me of money’s wonderful ability to gain strength through replication.
While I believe that someone who’s financially independent very early on in life will go on to continue to work and make lots of money, there’s a big difference between wanting to do something and having to do it. A wanted job is totally different from an unwanted job. And a dividend a day really does keep the unwanted job away.
How about you? On pace to one day collect a dividend a day? Are you enjoying money’s ability to replicate and gain strength over time? Interested in learning more about collecting a dividend a day? Check out my coaching service.
Thanks for reading.
Image courtesy of: ratch0013 at FreeDigitalPhotos.net.