How I'm Investing in Dividend Stocks for Passive Income and Financial Freedom.
Why Dividend Growth and Dividend Stocks I'm Buying!
My Story.
I didn’t allows know dividend stocks were the answer. But as a sophomore in high school, I knew I wanted ways to make my money work for me. For a while, I thought this would come through investing in real estate. I researched and read everything I could about real estate. While the idea of investing in real estate was exciting, the reality of it is that it had high barriers to entry, was a very high risk investment, and wasn’t truly passive income.
Discouraged, I went back daydreaming about ways to make passive income. I was aware of what dividend investing was, but like most, I wasn’t really interested in making a measly 2% return on my investments every year. I looked into higher yielding stocks, but unfortunately learned from experience that these investments typically don’t perform quite as well mid to long term.
Again discouraged, I felt that there was no real form of passive income that would allow me to build wealth long term. Then I ran across the idea of dividend growth investing.
1. Why Dividend Growth?
I didn’t fully understand the concept of dividend growth at first. I knew reinvesting your dividends played a major role in creating the compounding effect, but it wasn’t until I saw a real example of dividend growth investing that I realized how powerful it could be.
2. Broadcom ($AVGO) Example
One of the best examples recently of a great dividend growth company is Broadcom ($AVGO). As you can see below, in 2013, this company was paying 19 cents per share quarterly, with a share price of $35.64. This gave them a starting dividend yield of 2.13%.
When I was a sophomore in high school, this was the exact type of stock that I would’ve loathed investing into. But let’s fast forward 10 years to now, and see what the results would’ve been.
As you can see above, they now pay out $4.60 per share quarterly. This means that the dividend yield on cost would now be a staggering 51.63%. With an initial investment of $1,000 in 2013, you would now be receiving $516.27 in dividends every single year! Keep in mind, this is without reinvesting any dividends over that time period (wow!).
3. The purpose of this Substack/Newsletter
While I release monthly portfolio updates on my YouTube channel ( Dividendology YouTube ), the goal of this substack will be to go more in depth into my buys and sells every month. If you want to follow along with the stocks that I’m buying and selling, then you will definitely want to subscribe.
Who knows, maybe I’ll even share some other fun and exciting investing ideas in the future! I have a lot more that I’d like to say, but I think I’ll keep it short for now. Thank you all for reading and I hope you’ll join me on my dividend investing journey!