How We Plan to Retire on Dividends 3

I am six months closer to retirement since I published the last article in this series. My dividend portfolio is a shining example of what can happen when you decide to focus on something truly. I am (with my lovely wife, of course) going to achieve $1,000 in dividends this month.

Now, let’s take a step back and recognize the power of this $1,000. So, for the rest of my life, I will have $1,000 coming into my account, whether I decide to work or not? Dividends are a compelling way to live your life, as they will set you free.

This is a great place to start if you are new to dividends. You can also go back and read “How We Plan to Retire on Dividends (part 1)(part 2)” to catch up on a lifetime of dividends. Welcome to your new life; let’s get started. 

INVESTING MINDSET

You will never understand the feeling of receiving guilt-free money until you start investing. Dividends make you feel like it’s raining money, which will completely change your life. 

You can let dividends supplement your lifestyle if you already have a retirement plan. Dividends can assist you in achieving whatever financial goals you set for yourself. 

The stock market has been volatile this year, making for some emotional investing. Remove the emotions and look to increase your dividend yield. We all like finding things on sale, which is the same on the stock market. 

We do not know what life holds, but I know money can help me in most cases. Dividends can serve as a safety net against life’s typical and unseen traps.

Of all the different investing styles, I prefer income investing. I love looking at high yield securities and reinvesting dividends into products on sale. I know that I am growing my paycheck one month at a time. 

Dividend growth investing is a great way to grow your nest egg and income stream simultaneously. You can leverage dividend increases, share price appreciation, and the power of compounding to make you rich. 

Do you remember how much you looked forward to Santa’s presents every year? As adults, Santa brings dividends to help you pay for gifts for the younger generations. 

INVESTING PLANNING

Every Easter, our children search for Easter eggs during hunts. At the same time, we need to build our own Nest Eggs to ensure our family traditions survive for years to come. 

One of the most important investing principles to understand is debt vs. equity. In life, almost everything we do involves interest, dividends, bonds, loans, or shares. If you can learn this, you can make waves as an investor. 

Getting started with dividend stocks is the most challenging aspect of investing. In particular, choosing your first five stocks is tough. Once you get past this step, you’ll be well on your way to investing success. 

If you don’t understand closed-end funds and preferred shares, there are other ways to invest in high-yield securities. High-yield blue-chip stocks like Phillip Morris (PM) and Altria (MO) can give your DGI portfolio the kick it needs. 

You can build an entire investment portfolio in 8 steps. This covers everything from a high-yield savings account to an income portfolio—you only need to adjust the numbers to your risk profile. The 8 Steps method incorporates all three dividend styles as well. 

Most people invest for capital gains, which can be fleeting. I invest for dividends because it is much easier to choose a winner. Even better, your dividend stock may give you capital appreciation as well. 

I am glad that I will receive a nice military retirement in a few years. However, if you didn’t join the military, you can still build a great portfolio via dividends. 

Becoming a writer allows me to build royalties while sharing my knowledge with the world. Royalties and dividends are similar in that they can pay you independently of your time. However, dividends cost money upfront, while royalties cost time. 

Please do not depend solely on social security for your retirement. In fact, do not depend on social security at all. Dividends provide the best option for staying ahead throughout retirement. 

An emergency fund is not optional, but you can still achieve an excellent yield from your savings. You can use savings bonds, Treasury bonds, and USDC stable coins to get a return on your emergency fund. 

There are two ways to get a 9% return on your money; you can choose between USDC stable coin or building an income portfolio. So, which would you choose? Or can you leverage both to your advantage? 

Fundrise is one of my favorites real estate investment trusts (REITs), but it does not trade on the stock market. However, there are advantages to having REITs that trade on the stock market. It’s best to understand which ones can help your portfolio the best. 

ADVANCED TECHNIQUES

Index funds are the safest instruments on the stock market, so it’s a great strategy to incorporate them into your various portfolios. Here are my four favorite index funds

Part of becoming a great investor is minimizing your tax bill. There are a couple of great ways to do this: municipal bonds and Roth IRAs. One is excellent for today, and one is better for tomorrow. 

Few people understand the difference between saving and investing. Saving is a function of time and discipline. Investing is a function of knowledge and discipline. 

Sometimes, it is a good idea to go back to the basics when investing. Review your investing principles and see if you need to upgrade or change your methods. 

The 60/40 investing rule concerns your allocation between stocks and bonds. However, this rule is over 30 years old; is it still effective today? Especially now that bond yields are in the toilet? 

I receive some of my dividends directly to my Cash App debit card (my dividend debit card). There is no better feeling than getting a notification on your phone that you have money in your account. It’s life-changing. 

Investing is not supposed to be exciting; it should be akin to watching paint dry. Part of the process of investing is dollar-cost averaging into your favorite stocks. You simply put a regular amount of cash into your stocks on a boring schedule. Then you become rich. 

When we invest, we put our needs for tomorrow ahead of our wants of today. The magic of investing is making today and tomorrow better by giving you the peace of mind to enjoy both simultaneously. 

If you are apprehensive about picking individual stocks, you can build an entire portfolio based on passive index fund investing. Even better, if you acquire enough money, you may be able to live off the dividends from your index funds

Government workers use TSP as their 401K equivalent. How does investing in TSP compare with building a dividend growth investing portfolio? 

You have a few options when it comes to investing outside of the stock market. You can try savings bonds, treasuries, or USDC to see which one best suits you. Or you can use all three together.

INVESTING FOR INTEREST

I always wanted to do a series on investing in debt, and I completed it over the last six months. Here is the six-part series. 

  1. Investing for Interest 101: What is Fixed Income?
  2. Investing for Interest 102: Super Safe Savers
  3. Investing for Interest 103: Treasure in Treasuries
  4. Investing for Interest 104: Bountiful Bond Funds
  5. Investing for Interest 105: The Hunt for Baby Bonds
  6. Investing for Interest 106: My Favorite High-Yield Savings Account

BOOK TAKEAWAYS

If you are starting a portfolio with hopes of building generational wealth, dividend growth investing is the best method for you. As companies grow, split, and rebuild, your wealth will accumulate, making you rich.

Can you achieve an infinite return? If so, you can invest that money to make even more cash flow. This strategy is called “Infinity Investing.

There are many alternatives to stock market investing; one option is investing in wine. However, you need a large sum of money to get started and a trustworthy broker. It is a game for the rich. 

What are your money habits? Why do you make money-related choices different from other people? This is all part of the psychology of money.

CONCLUSION

Wow, I can’t believe we completed another massive book on dividends. Please read parts 1 and 2 to get even more knowledge on dividends. Dividends can set you free from our financial prisons and let the light shine through the clouds. 

  1. PDF of the Month: 505 Takeaways from 101 Books (pdf)
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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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