This Is When Your Dividend Snowball REALLY Takes Off
There are obviously many ways to create passive income, and dividend investing is definitely not everyone's cup of tea.
Some consider it to be "too slow," which I totally understand. The slowest part of the journey is the start, and it's not easy to get excited about something that might take 5, 10, or even 20 years to see results.
However, you'll reach a point in your investing journey (and trust me, it happens sooner than you think) when the progress you're making becomes hard to miss. At this point, you'll come to understand just how powerful the dividend snowball effect can be, and things in your portfolio start to get real exciting.
I remember when I was first getting started, my dividend payments were just a few cents here and there, which was extremely bittersweet.
Charles Schwab | One of my early dividend payments from SWKS
On one hand, getting those initial dividend payments was thrilling because this was my first real taste of passive income and at the end of the day, it was money that I didn’t have to lift a finger for.
At the same time, it was only like $0.50 here, or $0.79 there, and even when reinvested, this wasn’t going to make a huge difference for my portfolio. I felt like it was barely a drop in the bucket.
With that said, I knew this was something that would be a slow burn in the beginning. I also knew that with consistency and time, these sub-$1 payments (and the subsequent months of little income) would grow into a number much larger, but I really underestimated just how quickly this would happen.
My FREE Portfolio Tracker | Dividend income breakdown
Today, after only a few years of consistent and dedicated investing, I find myself about $160 away from reaching $2,400 of annual dividend income across my two portfolios — my taxable brokerage account and my Roth IRA. This equates to an average monthly income of $200, and while I'm not eligible for financial freedom quite yet, this milestone is approaching much faster than I thought it would.
Moreover, I recently had my highest day of dividend income ever, and made almost as much in one day as I did in my entire first year of investing.
The point is that while dividend investing can be slow, and those initial payments might not exactly set the world on fire, after a couple years of keeping your nose to the grindstone with consistent investing, you'll be MUCH farther along than you anticipated and your dividend snowball will begin to take on a life of its own.
All you have to do is get started and keep going.
With that, I want to hear from you. How much dividend income are you currently bringing in, and how long did it take you to get there? Reply to this email, or write to me here and let me know.
And a big thank you to the 9 readers who responded to last week's newsletter. You rock! 🙌
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IN MY PORTFOLIO
Want to get my Dividend Portfolio Tracking Spreadsheet? Click here to get it for free.
PURCHASES
EPD - $317.62 invested, 12 shares
O - $303.63 invested, 5 shares
WSM - $689.50 invested, 5 shares
SALES
I sold out of one position in my portfolio this week, but I'm keeping it under wraps for now as it will be the subject of next week's newsletter - stay tuned!
DIVIDENDS
Weekly Total: $56.81
Monthly Total: $56.81
Annual Total: $1,236.41
ICYMI
CAREFULLY CURATED
WHAT I'M WATCHING
How to Become A Millionaire With Dividends | Ari Gutman
Warren Buffett Explains the 7 Rules Investors Must Follow in 2023 | New Money
Did this book change my investing strategy? | Kevin Burgess
WHAT I'M LISTENING TO
Special guest episode #12: Meet Lucas Orr! | One Penny At A Time
3 D’s of Retirement: Dividend Yield, Dividend Safety, Dividend Income | The Dividend Guy Blog Podcast
WHAT I'M READING
One bull case and one bear case for AT&T.
Sentiment towards California has been cold, but these three California-based REITs are red hot.
Five dividend increases expected to come in August.
Morningstar's top ETFs.
SUBCRIBE TO THESE NEWSLETTERS
Invest With Conviction with Mike The Dividend Guy | If you're a dividend growth investor, then Invest With Conviction is a must-read.
Dapper Dividends | Dapper Dividends brings you weekly updates on everything related to dividends, helping you hone your dividend investing skills.
Long Term Mindset | Long Term Mindset encourages you to invest better and think long-term with curated, timeless content delivered every week.
The Daily Upside | The Daily Upside is a free unbiased newsletter covering the world of business, finance, economics, and investing.
The Yellowbrick Road | Their AI tool reads and summarizes 100s of stock articles every day and sends the top 10 every day in this free email.
Market Briefs | With over 93,000 articles published online every single day, Market Brief delivers only the most important, need-to-know financial + market news.
MIND GAMES
Crossword: This week’s crossword features Warren Buffett’s mentor, JP Morgan’s CEO, and Home Depot’s biggest competitor. Solve it here.
WANT MORE DIVIDENDS?
That's all for this week's newsletter!
If you're still crazy for cash-flow, here's what else I've got for you:
Read all previous editions of the newsletter.
Binge all of my YouTube videos.
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See my full list of recommend stock research, portfolio tracking, and other investing resources.
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