For Dividend Growth Investors, there are two levers we can pull to increase our dividend income: Time and Money.
Each of these will help you achieve your goals, and together they are magical.
We are each on a different timeline for our dividend income goals. For those with a shorter timeline, the best lever we can use is to get our money working. Each dollar we can commit to DGI, the sooner or the more income we will get from that dollar.
The chart below shows how much income you will get in a given year for every $100 investment you make, based on the current yield and dividend growth rate.
$100 One-Time Investment Income Received Each Year
Yield % | Div Growth % | 5 years | 10 years | 20 years | 30 years | 40 years |
3.00% | 7.00% | $4.00 | $7.00 | $19.00 | $49.00 | $122.00 |
5.00% | 5.00% | $7.00 | $12.00 | $27.00 | $59.00 | $119.00 |
7.00% | 3.00% | $10.00 | $15.00 | $30.00 | $52.00 | $82.00 |
I call the process of continually investing money into my dividend investing journey as me Stacking Dividends. Brick by Brick, adding $100 here and $100 there, stacking up over time and creating the passive income that I am going to need later on in life.
Allocate $100 today – boom, $19 a year in year 20
Add more next week – boom, another $19.
Add $500 from a bonus – bam – $95 in future income. Each Year!
It all adds up!
That $100 I can save this week is going to pay me $19-27 each year in 20 years. Do that or more every week and you can see how your investments can turn into real money you can use to live off of. If you are young, those dollars you invest today to use later can be life changing.
The more dollars you can commit, and the sooner you can get it working for you, the more income you will have.
Dividend Growth Investing takes time to show the true benefits, so get your money working for you as soon as you can!
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