Tuesday, April 13, 2021

A Reflection On The Power Of Dividend Growth Investing & Frugality

Over the past couple days, I have been thinking about just how far I have come since I began my investing journey in September 2017. As I'm just a couple years away from approaching the milestone of my net annual forward dividends matching the income that I earned at my first job as a part-time cashier at Shopko in my first two years of undergrad, I thought it was an apt time to examine the power of dividend growth investing and frugality in real time.

Image Source: Pexels

As I alluded to in a post a couple years ago comparing my income writing for Seeking Alpha and working as a cashier at Shopko, I made an average of around $4-5k annually over my two years at Shopko.

At the present moment, my net annual forward dividend income is $1,602, which is despite the fact that my portfolio has sustained numerous dividend cuts over the past year, and that I didn't start investing meaningful capital of more than a few hundred dollars a month until I completed my Bachelor's degree in August 2019 as I noted in my post of lessons that I learned after two years of investing.

Assuming that I invest $15k from May to December of this year, and that I invest $20k in 2022 and another $20k in 2023 at a 4.0% net yield (which I believe will ultimately prove conservative as it factors in no increase in earnings over the next couple years), my net annual forward dividends will be within my range of average annual earnings while I was a part-time cashier in college.

If you had told me just 6 years ago when I began my first job in college that in less than a decade, my net annual forward dividends would match that of my earnings at my first job, I really wouldn't have believed you.

It's breathtaking to think that in the span of just 6 years since my first job, I have paid nearly $40k in tuition/books and accumulated a dividend portfolio worth nearly $50k while never even cracking $40k in annual earnings.

A 60%+ savings rate combined with the power of dividend growth investing is capable of almost literally moving mountains and parting the Red Sea in financial terms, which is what makes me so damn excited for the next 6 years of this journey!

Concluding Thoughts:

I hope that my short story outlined in this post. the story of a guy that has been extraordinarily ordinary in virtually every respect of his life, serves as motivation to those that are in the very beginning stages of their journey, and as a reminder to those that are further along, that dividend growth and frugality are arguably the most potent one-two punch to the financial promised land.

If I'm capable of making such tremendous progress in a relatively short amount of time adhering to the principles of dividend growth investing and frugality, I truly believe everyone is capable of doing so!


Are there any milestones within your DG portfolio that you have thought about lately?

As always, thanks for reading and I look forward to your comments in the comment section below!


  1. Hey Kody, that's an exciting milestone to have your dividend income reaching as much as your first job. I'm looking forward to seeing your cross over that point. Your plan to get there sounds solid. This shows the power of dividend investing for sure.

  2. RTC,

    Thanks for stopping by and the support over the past 3 years. I'm stoked for the next 3 years of this blog!