Motivational speaker Jim Rohn has a great quote that’s highly memorable:
“You’re the average of the five people you spend the most time with.”
Now, you could quibble with the numbers a little bit.
But there’s a simple theme we can take away from this.
And we can apply that theme in our investing activities, making us far better and more successful investors over the long run.
That theme is…
Surround yourself with winners.
If you surround yourself with winner people in life, you’ll find it challenging to not do incredibly well. A rising tide lifts all boats.
Likewise, if you build a portfolio of world-class businesses, surrounding yourself with winner businesses, you should do quite well over the long term.
Even better, surrounding yourself with winner businesses is pretty straightforward.
Easier To Surround Yourself With Winner Businesses
It can actually be difficult to pick out the best people.
Judging character isn’t easy. Human nature is a tricky beast.
People like to lie and pretend. They make things up. Bad qualities are swept under the rug.
Nobody wants someone else to see their ugly side. So we put our best face forward and try to get people to like us.
As such, it can take a while to figure out if you’re talking to a real winner or not.
However, picking out winner businesses isn’t all that difficult.
That’s because publicly-traded companies have to show their pretty and ugly sides. They’re legally obligated to show you all the numbers.
I can tell, within 60 seconds, just how much money a public company has on its balance sheet.
Now try squeezing that information out of someone within 60 seconds of meeting them. Not gonna happen.
With this in mind, you really have no excuse when it comes to surrounding yourself with winner businesses.
I can see how one can get duped by a significant other, partner, or friend. But it’s much more difficult to become deceived by a public company.
It happens, of course, because business dynamics can change quickly. Mismanagement and malfeasance can also occur from time to time. Companies are ultimately run by people, which speaks to what I’m talking about here. But that’s why we diversify. There’s more than one winner business in the world. That’s for sure.
Indeed, it’s the very nature of diversification that makes surrounding yourself with winner businesses much easier than surrounding yourself with winner people.
You’re not going to have 30 or 40 significant others. Or 100 winner friends.
But you can have 30, 50, or even 200 winner businesses that you’ve surround yourself with. That’s very possible.
So make sure to take advantage of this.
High-Quality Dividend Growth Stocks
It should be no surprise that my favorite way to surround yourself with winners is to invest in high-quality dividend growth stocks for the long haul.
My FIRE Fund says it all.
That’s my real-life and real-money early retirement dividend growth stock portfolio.
I’ve surrounded myself with 115 different winners.
How do I know they’re winning?
Well, that’s quite easy. And it’s a major part of why I’m a dividend growth investor.
Sure, I can pull up any 10-Q, 10-K, or annual report. That will quickly tell me how much they’re winning.
But it’s even better and easier for me because I’m collecting five-figure and growing passive dividend income from these winners.
In fact, I’m collecting a dividend a day (which keeps the unwanted job away).
The winning, for me, is tangible. I see the cash in my account. The “proof in the profit pudding” shows me just how much these companies winning. I’m reminded every day. I don’t need to be told how profitable these winners are. I’m shown.
Dividend growth investing is the perfect strategy for achieving financial independence and retiring early.
But it’s also the perfect strategy for surrounding yourself with winners.
Dividend growth investing inherently makes it difficult to surround yourself with anything other than winners.
After all, you can’t manage to pay out increasing cash dividend payments for years – or decades – on end without doing a lot of things right as a business.
It’s almost impossible to run a loser business while simultaneously writing ever-larger checks to your shareholders for many years in a row.
Moreover, any intelligent investor would see that something is awry when the financial statements start to fall apart.
I’ve surrounded myself with the likes of Johnson & Johnson (JNJ), McDonald’s Corporation (MCD), and Realty Income Corp. (O).
These are winner businesses all the way around.
And that’s partly evidenced by the fact that all of them have been paying rising dividends for decades. And there’s no reason to believe they won’t continue to win and pay out increasing dividends for decades to come.
When Johnson & Johnson sells pharmaceuticals, McDonald’s sells burgers, and Realty Income earns rent from tenants, they win.
Then I win, because I collect a portion of the profit those transactions generate. That portion comes my way via cash dividends.
And those cash dividend payments fund my life, which allows me to live my FIRE lifestyle in Thailand. I’m a job-free 36-year-old guy living out my early retirement dreams.
Talk about winning!
We should always aim to surround ourselves with winners in life.
I mean, my life would be totally different if I surrounded myself with unsuccessful and apathetic people. If I spend all my time around, say, drug addicts and alcoholics, that reflects on me. I become more like them, whether or not I realize it. It changes my mindset. Indeed, I had to emancipate myself from my own mother at a very young age because her drug addiction and poor behavior would have eventually brought me down.
I now have a very small and tight circle of people in my life that I trust. I enjoy their company. They bring out the best in me, and vice versa.
I have a tight circle largely because high-caliber people are hard to find.
However, it’s much easier to surround yourself with winners as an investor.
There are dozens of high-quality companies out there that have been winning for decades… and will likely continue to win for decades to come. That winning is partially evidenced by lengthy track records of growing dividends. And those growing dividends can be the passive income that allows one to achieve FIRE and create a customized, enjoyable, productive life.
An investor should always surround themselves with these winners.
They win. You win. We all win.
Full disclosure: I’m long all aforementioned stocks.
What do you think? Do you surround yourself with winners?
Thanks for reading.
Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net.
P.S. If you’re ready to win by investing in dividend growth stocks to achieve FIRE, check out some fantastic resources I’ve personally used on my way to becoming financially free at 33!