Even though I’ve moved halfway across the world, I still can’t seem to totally get away from US media, stock market news, and all of the related “noise” an investor is going to experience over the course of their investment lifetime.
I’m trying here, folks!
To quote Al Pacino’s Michael Corleone:
Just when I thought I was out, they pull me back in.
So getting into today’s subject, I want to start by noting that I consume a lot of content.
I spend hours per week reading and watching various things that interest me. I think of it as wasting moments, in the best possible sense of that terminology.
Some of the content I consume is from YouTube’s vast library.
Well, YouTube has their “Recommended” videos that pop up at the top of the page every time I load the site (taking into account my viewing/browsing history).
One recent recommended video was an interview CNBC conducted with Kevin O’Leary.
Successful Investing Is Boring
Normally, I wouldn’t click on a video like that. But the title drew me in.
I guess I’m a simple guy. I see Kevin O’Leary talking about dividend stocks, and I check it out. I’m a retired guy. I’ve got a little time for it.
Anyway, here’s the interview: Kevin O’Leary on market sell-off: I favor ‘boring as hell’ dividend stocks in times like these.
This quick piece with Kevin motivated me to write this off-schedule and off-the-cuff article. I don’t say that because the interview was valuable, educational, or even particularly insightful, but rather because the words he used caused a bit of an “aha moment” for me.
Now, you can say whatever you want about Kevin. But you can’t deny that he has a way with words.
This time around, he decided to call dividend stocks “boring as hell”.
I couldn’t agree more.
If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.
Many high-profile and very successful investors have said similar things, along the lines of successful investing being analogous to watching paint dry or grass grow.
Amen to that.
I’ve long argued that successful investing is simple , and dividend growth investing is such a great long-term investment strategy largely because of how boring and straightforward it is (due to the inherent implied focus on really high-quality, established companies).
Indeed, I honestly spend very little time these days thinking or worrying about money or stocks. If I didn’t write about this stuff, I’d have almost no clue as to what the stock market/pricing is up to. I still have a very good idea as to what all of my businesses are doing at the operational level, but it’s never required much time to manage a large dividend growth stock portfolio.
The whole point of FIRE, in my mind, is to build a lifestyle that maximizes one’s free time so that they can devote themselves to a wide variety of interesting and passionate pursuits. To be free from a job, but not free from money itself, is only exchanging one master for another, which doesn’t strike me as a major improvement.
Of course, investing is a passionate pursuit of mine.
But not in the sense that I want to watch screens or stress out/think about the stock market. Time in the market beats timing the market. However, the major ingredient to that equation, time, is a rather boring thing – you have to just let it pass without any input on your part.
That’s how compounding works. Rolling a compounding, dividend growth snowball requires a lot of patience. It requires you to just sit on your hands, which is harder than it sounds. Waiting is hard for most people.
For example, I have a rather large position in Johnson & Johnson (JNJ).
It’s the largest single position, by market value, in my entire FIRE Fund.
Guess how much time I’ve spent thinking about, reading about, or looking at anything related to Johnson & Johnson over the course of the entirety of 2018?
You’d be right if you said less than five minutes.
I mean, it’s a global healthcare company. We’re talking pharmaceuticals, consumer products, and medical devices here. Total snoozefest.
Moreover, Johnson & Johnson doesn’t need little ol’ Jason Fieber to watch over their shoulders. They’ve got things pretty well figured out.
So it’s boring. Which is wonderful.
But it’s also so, so, so exciting!
Successful Investing Is Exciting
See, Kevin only got it half-right.
Dividend stocks are “boring as hell”.
But they’re also exciting as hell.
That’s because of their very nature.
Just imagine for a second someone told you that you were going to collect hundreds, or even thousands, of dollars per month, for the rest of your life, for doing nothing at all. And they also told you the money you’re collecting would grow annually, likely at a rate that greatly exceeded inflation.
How would that make you feel?
You’d be jumping for joy. Of course you would. I know I would.
Well, that’s exactly the spot I’m in now, as I’m on pace to collect almost $1,100 per month in dividend income over the next 12 months.
It’s awfully exciting to know you’re getting paid for nothing.
It’s actually exciting to get paid for anything.
Anytime we collect money, there’s an emotional response. There’s some elation, even if it’s slight. Money makes the world go round. It might not directly correlate very well with happiness in most circumstances, but I’ve never known anyone to complain about having too much money.
So if that’s the case, it’s way better to get paid for doing nothing at all, which frees you up to go after those aforementioned interesting and passionate pursuits (which will probably also pay money).
Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.
-John D. Rockefeller
Well, that might be a stretch. I can’t speak for Rockefeller, but dividends aren’t the only thing that gives me pleasure (and Rockefeller might have changed his tune if he were born in the age of the Internet).
But there’s no doubt that it’s a pleasurable experience every time a dividend rolls in. And since I’m collecting a dividend a day, I’m getting a lot of pleasure over here!
Dividends ask of you nothing, yet give you everything.
I don’t have to do anything to collect a dividend. No number to call. No letter to write. No permission to ask.
I wake up – I simply continue to exist – and I’m paid.
That’s not such a tough task. Even I can do that.
Yet those dividends are the lifeblood of my financial freedom. They’re my very life, for I couldn’t live this lifestyle without them.
It gives every morning a certain special feeling for me, knowing that I’m waking up to being paid by some wonderful business out there. It’s like waking up to a check every morning. It’s like having your birthday every day of the year.
That’s a hell of a lot better than waking up to an alarm clock.
I was prompted my Mr. O’Leary to write this piece after he provoked a wry smile and laugh out of me with his “boring as hell” comment regarding dividend stocks.
He was right.
But he was also wrong.
Investing in high-quality dividend growth stocks is just like watching paint dry. Which is to say, when properly executed, it’s just about the most boring and successful way you can go about investing.
However, collecting growing dividends, especially in a very routine fashion, is one of the more exciting aspects of life, as the totally passive and increasing income can free one up to do even more amazing things with their life.
I’m a coffee fan. I remember the old marketing campaign for Folgers Coffee: “The best part of wakin’ up is Folgers in your cup.”
Well, I think waking up to a cup full of dividends is much, much better. And more exciting.
Full disclosure: I’m long JNJ.
What do you think? Is successful investing both boring as hell and exciting as hell?
Thanks for reading.
Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net.
P.S. If you’d like to take part in boring and exciting investing, check out some fantastic resources that I personally used as I went from below broke at 27 to financially free at 33!