I’m far from the richest guy around.
But I am financially independent and retired in my 30s.
I was able to quit my job at 32 years old, which allowed me freedom to start crafting the life of my dreams.
I now do precisely what I like to do, every single day. It’s a dream.
And it’s a dream that I think almost anyone else can experience, as I lay out in 5 Steps To Retire In 5 Years.
Of course, I’m able to live this dream life because I collect the passive income necessary to pay my bills and cover my essential expenses without needing a job.
The five-figure passive income I live off of is generated by the FIRE Fund.
That’s my real-money early retirement stock portfolio.
I built the Fund by routinely investing my hard-earned savings into undervalued high-quality dividend growth stocks.
Most of the Fund was built over the course of only six years. And I did that on a middle-class salary that I earned at my car dealership day job.
Dividend growth investing is the investment strategy that unlocked FIRE for me.
The strategy changed and saved my life. I’m forever grateful for it.
If I hadn’t started buying undervalued high-quality dividend growth stocks back in early 2010, I’d still be a miserable grunt at my old job, daydreaming about a better life somewhere else.
With that in mind, you’d be hard-pressed to find a more vocal advocate of dividend growth investing than yours truly.
I’m an advocate because I’ve experienced the results firsthand. I know what it’s like to live off of dividend income at a young age, and I think this lifestyle is too amazing to keep secret.
However, I’m here to tell you that undervalued high-quality dividend growth stocks can be terrible investments.
Let me explain.
I’ve received many emails and comments over the years from readers who are fearful of buying stocks.
They’re afraid to lose money. They don’t want to risk it.
My response to this apprehension is, it’s actually easy for an undervalued high-quality dividend growth stock to do absolutely nothing for your wealth and passive income.
You read that correctly.
It might be the greatest stock in the whole world, yet it could do zilch, nada, nein for you.
You simply need to avoid buying it.
This brings me to one of the most valuable pieces of advice I can ever share.
Dreams only come true when you take action and make things happen.
As Shia LeBeouf would say, just do it!
Nobody is going to knock on your door, take you by the hand, and whisk you off to a mystical fairyland. You’ll never have anything you don’t take.
The FIRE Fund didn’t build itself. My financial independence didn’t achieve itself. My dream lifestyle, which now involves traveling the world, didn’t create itself.
And that undervalued high-quality dividend growth stock won’t buy itself.
If you never take action, you’ll never reap the rewards.
Even the greatest stock in the world can be a terrible investment, if you never buy it.
That’s by virtue of the opportunity cost you absorb by not taking action.
While some investors hem and haw over a 5% +/- differential in valuation on a stock, there are plenty of other people out there never committing a dime to investments in the first place.
Either through fear or ignorance, they avoid stocks completely. And they’re missing out big time.
Be careful of this opportunity cost. Apprehension and fear can be very, very expensive.
Sure, not every stock I buy will be a great long-term investment. There’ll be some businesses in my portfolio that end up going the wrong way on me. I’m wrong sometimes. That’s risk.
It’s a calculated risk I happily accept.
The biggest risk I could ever take would be to not take risk.
I guarantee myself a 100% loss on every dollar I waste instead of investing.
So make sure you don’t make a horrible investment out of what could be an amazing investment. Keep perspective.
Undervalued high-quality dividend growth stocks can be incredible creators of long-term wealth and passive income, but only if you actually step up to the plate and buy them.
Don’t make inaction the action you decide to take.
Don’t let avoiding risk be your biggest risk.
And don’t let those dreams be dreams.
What do you think? How important is it to take action?
Thanks for reading.
P.S. If you’re ready to take action and achieve financial independence, check out some phenomenal resources that I personally used on my way to becoming financially free at 33!