Do you remember how excited you were on Christmas Eve as a child? We used to wake up at 6 am and run to open presents. No matter what we received, we were happy and blessed.
Those magical moments will forever live on in our hearts because it was all about love. Our parents probably struggled to buy us the presents they gave us.
Times were hard for many of those years, but my parents were soldiers through it all. They didn’t know about passive income and dividends. If they had, things might have been different for them.
4 Steps to Become Rich
Today, I am a parent of two boys (15, 10) and a husband to my wife Kristina (married 16 years). Now, it’s my turn to give my children gifts under the Christmas tree. (We don’t believe in giving as many gifts anymore, but that’s a different story.)
Who is Santa? Santa is a magical person who delivers presents to all the children of the world (who deserve them). We believe in Santa because he is here to bring us joy and happiness, at least for one day.
But what if he could bring joy and happiness all year round? What if you could wake up ten times a month and have presents under your Christmas tree? How would it make you feel to have received loving gifts every month?
Dividend Santa. Santa may only work one day a year, but your dividend portfolio works every day of the month. Dividend Santa is here to bring you happiness, freedom, and lemonade. Hey, when life gives you lemons, you will have to make lemonade.
There are many ways to build a dividend portfolio, so you will have to pick the best way for yourself. My article “Dividend Growth Investing vs. Income Investing” is a good place to start. If you are a beginner, try “Stock Market Investing 107: Back to Basics.”
The Magic of Passive Income
Why dividends? More important than the methodology of dividends is the psychology of them. Why do you want to invest for dividends? You will have to find your reason for investing in dividends.
Your dividend portfolio will start very slow. You will need to be patient and keep putting in the hard work to grow your stocks. However, the power of compounding starts to work faster and faster.
Our brains cannot fathom the true power of compounding, so the best thing to do is let it work on its own—we need only add more stocks. Without your “why” you will fall into the trap of capital gains or becoming a trader, not an investor.
Ask yourself where you want to retire and when. If you’re going to work until 65 years old, you’re probably already on the right track. If you’re going to retire at age 50, you have to do something different from everyone else.
The saying goes, “If you do what everyone else does, you will get what everyone else gets.” Most people will struggle through retirement. They will live on social security and maybe a tiny 401K. Do you want to live on a fixed income for the rest of your life?
The Golden Handcuffs of Lifestyle Inflation
The magic of dividends. The magic of dividends is that they are guilt-free money deposited right into your account. You can build the exact portfolio that you want. If you want an 8% dividend yield, you can earn $80,000/year from $1 million.
Dividends are the most passive of all sources of passive income. You need only invest in trustworthy stocks and check them 1-2 times a year. Use dividends in conjunction with other sources of passive income, and you’ll be the star of the show.
Dividend Christmas. My wife and I will earn roughly $600 in dividends this Christmas. We can spend every single penny of this money on gifts and not feel bad at all. Remember, dividends are guilt-free money, and should be a part of everyone’s life.
Inflation vs. Dividends
I remember how my parents struggled to get us the gifts we wanted. They didn’t know about dividends, and stock market investing wasn’t mainstream back then (in the early 80s). You had to have money to start investing because you needed a broker and had to pay broker fees.
In 2022, we should all be investing. Most people do not invest for dividends because it is not sexy. No one wants to hear about a 4% yield when they see Tesla going up 30% in a few days. However, when I get my $33 dividend from Altria (MO) directly to my Cash app debit card, people notice.
Can you imagine going to lunch and receiving a $33 dividend right on the spot? How about a $330 dividend? That’s the life I plan to live. My wife and I are all-in on dividends and passive income. Not because we are greedy but because this lifestyle can lead to a better life for our kids.
The real presents. The real gift we are giving our children is the gift of financial education. The more they understand about dividends and passive income, the less fear they amass in the world. They don’t have to overcome financial adversity because they already speak the language of money—they need only follow the steps laid before them.
Start your dividend journey today. This Christmas, take the time to decide WHO you want to be and how you will achieve this goal. Do you want to be a scared employee, living paycheck to paycheck? Or do you want to understand money, passive income, leverage, debt, and taxes?
Children need Santa, but so do parents. My parents would have had a much easier time providing for us if they had access to dividends. Enjoy your Christmas and New Year. If you want to have more financial freedom next Christmas, then make your New Year’s Passive Income Resolution today!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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