Getting Very Rich, Very, Very Slowly
Is patience its own reward? Sometimes, but in this case, patience will result in getting rich. Lots of patience and more time will result in getting very rich. If your dividend income doubles every 8-9 years, this requires about a 9 % increase every year (called a 9 % compound annual growth rate, or CAGR). So you have to wait about 8 ½ years to double your dividend income. And even with this patience, this is only true if you pick the right companies, i.e., just those companies that will be raising their dividends by at least 9 % a year.
If you have more patience and another 8-9 years, you will quadruple your dividend income, and will just begin to feel very rich.
Let’s look at the chart to the left. Clearly, it takes 16 years, and quadrupling your income to begin to notice how rich you are getting. However, this is the worst case scenario, since the chart assumes that no money is being added to any of the investments either through additional savings or through reinvestment of the dividends.
One can somewhat reduce the amount of patience required by Dividend Growth Investing if you reinvest all of the dividends in more shares, instead of spending it. In the case of the author, almost all of the income from dividends is spent on normal living expenses. Although the author is getting rich slowly, the amount of patience required is at a maximum.
If you have patience and discipline to let Dividend Growth Investing make you very rich, then subscribe by clicking the "subscribe" button to the left. Create a safe, growing income stream with your investments.