Just a few days ago, my portfolio was sitting at a record high of $194,000.
A day later, it dropped over $5,000.
Can you handle volatility?
Hereâs the thing:
If your portfolio was $1,940, and then it dropped to $1,890-
That would only be a $50 drop, which doesnât feel like much, but it is the same percentage drop as going from 194k to 189k.
I know, this seems obvious. But here is the fundamental truth behind this:
If you canât handle small amounts of money, you wonât be able to handle large amounts of money.
If your portfolio is currently in the beginning stages and $50 drop scares you, youâll have trouble handling a large portfolio when the time comes.
Now with all that being said, there is something beautiful about being a dividend investor, more specifically, a dividend growth investor during times of high volatility.
Why is this?
Because my ability to live off dividends isnât dependent on current market conditions.
The same day that my portfolio dropped by over $5,000, guess what happened to my projected annual dividend income?
It didnât drop at all. In fact it grew even larger.
When you focus on buying quality dividend growth stocks that grow free cash flow year over, you can feel feel comfortable about your dividend payments continuing to grow regardless of what is going on in the market.
Every month, my projected annual dividend income grows.
This style of investing is a no brainer in my opinion.
It allows me to sleep well at night.
My projected annual dividend income at the end of the month was $5,860.
And I rest assured that next month it will be even higher.
In the month of July, I made $256.54 in dividend income.
And my average monthly dividends is now sitting at $488.40. Iâm getting very close to that $500 a month milestone.
As of this moment, my portfolio value is a little below its all time high, currently sitting at about $191,900.
With interest rate cuts on the horizon, economic uncertainty, and a massive upcoming election, itâs ver likely we continue to see heightened levels of volatility in the market moving forward.
But this doesnât concern me.
Again, my ability to live off dividends isnât dependent on current market conditions.
In fact, volatility is great.
It creates opportunity.
Peter Lynch summarized it perfectly:
When the opportunities come, Iâll be ready.
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See you next week!
Dividendology đ
Awesome post, agree and follow a similar philosophy!
Especially the point about percent differences. A very wealthy man I know once described that him buying a new $50k vehicle is like me buying my monthly groceries đ
Your sentiment is so true though. I remember when $50 and $100 drops scared me. Now on any given day the portfolio can fluctuate a few thousand dollars and I donât bat an eye.