I hear this saying a lot.
“It’s paid dividends.”
This is a colloquialism that’s common in our vernacular.
I’ve heard it used for all kinds of things.
Generally, someone will refer to the output of their hard work as the dividends paid.
For instance, a golfer who’s spent 10,000 hours practicing their swing will note that all that work has “paid dividends” when they start winning tournaments.
Or a student who passes a test after studying all of the appropriate material will believe (rightly so) that their studious habits have definitely “paid dividends.”
What’s funny is that I hear about people being paid dividends in the literal sense much less than in the figurative sense.
But what’s a better way to be “paid dividends” than to actually be paid real dividends?
Getting Paid Real Dividends
See, the thing is, there’s no better way to get paid dividends than to actually receive real dividends.
After all, where do you think the saying came from?
Indeed, my Full-Time Fund is set to pay out more than $11,000 in dividends over the next 12 months.
And since most of the stocks in my portfolio are dividend growth stocks – meaning they reliably increase their dividends at least annually – this number is almost sure to be significantly higher this time next year.
It’ll also almost surely be higher the year after that. And the year after that, too.
So on and so forth.
This is before even factoring in dividend reinvestment or new capital investment.
And that’s a major reason why literal dividends are so much better than figurative dividends.
Dividends Keep On Coming And Growing
If that golfer who practiced his swing for 10,000 hours stops practicing, what do you think happens to his/her game? What happens when the golfer gets old? Or retires?
Well, that prior practice certainly stops paying dividends, doesn’t it?
I’m a huge fitness buff, so much so that I’m studying to become a personal trainer. I’ve been working out since I was 11 years old. And I’m always interested in helping others become better versions of themselves, which makes me a happier and better me in the process. So it’s a natural fit.
The similarities between becoming more fit and becoming more wealthy, at least on the surface, are intuitive.
For example, losing weight requires ingesting less calories than you expend. And saving money requires spending less than you earn.
Both are simple concepts to understand at a high level. But both are difficult concepts to implement in everyday life. Otherwise, we’d all be rich models.
Both concepts can also pay dividends.
All that hard work in the gym pays dividends when it comes time to hit the beach.
And all that saving and investing pays dividends when a company you’re invested in pays its shareholders their rightful share of the company’s generated profit.
Well, one major difference between becoming more fit and becoming more wealthy is that money continues to work on your behalf even when you stop adding to it.
My portfolio will send out over $11,000 in dividends this next year whether I save any more money or not. In fact, I could stop saving for the rest of my life, yet I’d still eventually become a millionaire.
However, my body will quickly start to deteriorate (increased fat, muscle atrophy, etc.) if I stop hitting the gym six times per week (as I currently do) and watching my diet.
Money continues to replicate itself, becoming better at the process the more it does it. Muscle, however, will not replicate itself, if left to its own devices. Fat, well… we don’t really want fat to replicate itself, do we?
Dividends can and likely will pay real dividends for the rest of your life, actually becoming bigger and better over time. It’s the snowball effect: a snowball of money, once rolled, will highly likely just continue to become bigger and bigger over time.
But that’s not how pretty much anything else in life works.
And that’s why literal dividends are far better than figurative dividends, which is why there’s no better way to get paid dividends than to actually get paid dividends.
There are many ways to get paid dividends in this life.
You can practice to become a better athlete, which will likely result in being paid dividends when it’s time to compete. You could learn how to play the guitar, which may end up paying dividends when it’s time to impress a date.
There are a lot of actions that pay dividends, some of which are better than others.
Now, investing is just one of my many passions.
However, it’s the one that pays the best dividends of all. There’s just no better way to be paid dividends than to actually be paid dividends.
How about you? Do you enjoy being paid literal dividends more than figurative dividends?
Thanks for reading.
Image courtesy of: yodiyim at FreeDigitalPhotos.net.