Strategy

This is my personal investing strategy that I use to grow a consistent cashflow from businesses I invest in. In essence, it is very simple, I Earn, I Save, I then Invest.

A road towards financial independenceI follow a passive type of investing strategy called Dividend Growth Investing. It is not a get rich quick strategy, but a get rich someday type of approach. I consider myself a long-term investor who buys investments to hold on to them forever. There are some rare exceptions that I sell and mostly that is due to company's deterioration of fundamentals. I don't do any kind of day or option trading. I focus on investing into quality companies that have a long histories on distributing their profits by paying dividends to the shareholders. These same companies are also known as Dividend Champions and they tend to increase their dividend payouts on a consistent annual basis. The dividend increases themselves benefits the shareholders enormously overtime. A good example of this would be getting a pay raise every single year without asking for one, because a shareholder is a true part owner of the company invested.

saving-money-in-a-clear-piggy-bankOnce the dividends are deposited into my brokerage account, I then reinvest all of the dividends I receive from these companies manually when my capital allocation gets accumulated to about a $1,000. Though, it can also be reinvested with brokerages DRIP program, which reinvests the dividends you get paid automatically and doesn't cost a cent to do. In turn, with more capital reinvested regularly, my share ownership of these companies I invest in continuously grows and with increased amount of shares I own, then my future dividend payouts increase continuously as well. Its like one thing feeding another thing. I like to think of it as a never ending compounding machine or virtuous cycle of wealth building, that receives dividends and then automatically buys more company shares. By repeating this investing cycle over time, the proceeds uninterruptedly grow the cashflow of dividend income and the total value of the portfolio investments on annual basis.

growing-money-tree-with-compound-interestTime is really important tool here, since we cannot control it. It is our most valuable resource in our lives, which is slowly slipping away day by day. That is why it is paramount to invest as early as possible, so that over time, the compound interest can work its magic by compounding the reinvested dividends, dividend increases, company's organic growth, and currency inflation to grow your portfolio into a tremendous passive income stream. This is why Dividend Growth Investing is such an amazing wealth building strategy that can be created to supplement regular job income and most importantly, income stream during retirement years and beyond.

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