Dividends General Portfolio Strategy Welcome

Dividend Growth Investing While Young

It is a common adage that young investors should take on more risk than older investors and pursue high-growth investment strategies. There is a lot of reasoning behind this approach, but I believe it can be boiled down into three main points.

  1. Certain stocks have the potential for massive gains via quick increases in stock price. If you are successful at identifying these, you can get rich quickly.
  2. If you are unsuccessful at investing in the next “multi-bagger”, you still have plenty of time to make up for your losses.
  3. If you’re young and have a job that provides you with sufficient income, you don’t need to rely on the slow-growth or passive income that dividend stocks provide. Dividend income is not needed at a young age.

While I think that a portion of high-growth stocks have a place in every portfolio, I disagree with the approach that younger investors should overlook dividend investing entirely. Young investors do not need to entirely pursue growth-stocks, they don’t need to risk the potential large losses of this strategy, and I do not think that younger investors should avoid dividend paying stocks simply because they don’t need the income.

As an investor in my 20’s, my personal investing strategy is one of dividend growth investing. My strategy incorporates aspects of traditional dividend investing, value investing, and growth investing. I look for stocks of companies that pay dividends consistently, grows them consistently, appears to be undervalued (using a handful of techniques), and looks to be successful over the long term.

Through doing this, young investors can realize capital appreciation through successful use of both value and growth investing, they can have exposure to passive income through the dividend, and can build up their position over time by reinvesting the dividend overtime to compound their money.

Compounding is the key here. By reinvesting dividends, you are using that dividend to produce more dividends every time a dividend is declared. Compounding dividends is a powerful force for the long-term wealth builder, but it takes time for that power to grow and become significant. For this reason, young investors may not appreciate why dividend growth investing is such a sensible strategy for people who won’t be retiring till 40+ years from now.

Compounding is the 8Th Wonder of the World

Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.” Over time, your dividends will earn more dividends. Then your dividends that were earned by prior dividends will earn you more dividends. It seems simple, but it is surprising hard to wrap your head around just how powerful compounding is till you play some numbers and graphs. We will do that here.

Take Lowe’s (LOW) for example. For the last ten years, the stock’s average dividend yield has hovered around 2%. 10 years ago today, one share of LOW cost you $26.98. Let’s assume an initial investment of $10,000. Using Sharesight, I can back-test the performance of that investment with dividends reinvested and the result is shocking.

From June 2012 to June 2022, the stock price from $26.98 to $186.33. In 10 years, the stock price grew by almost 6x. Add to that appreciation, 10 years of growth and compounding dividends your position grew from $9,982.60 on June 11th, 2012 to $64,920.20 on June 10th, 2022.

Meanwhile, your quarterly dividend payout began at $59.20 and grew to $296 which yielded you total dividend payout of $5,960.70. With just 10 years of holding, your dividend payout grew by more than 5x and yielded you a total of $5,960.70.

The magical variable in this formula is time. In 10 short years, you can see in the graph below that the dividend payouts start to resemble an exponential curve. If I had back tested for 20 years instead of 10 years, the dividend would have grown from $4.24 to $339.20 and that curve would be more pronounced. This simply goes to show why it is a good idea for dividend growth investors to start early. The younger you are the more time you have available to you for compounding.

Comparison with Aggressive Growth Investing

The graphics above show the potential outcome of a dividend growth investing strategy played out over 10 years with only Lowe’s (LOW). Assume an investor was 55 when they started investing in LOW, held it for those 10 years, then decided they wanted to retire at 65. However, now assume that that investor was persuaded that Facebook (now Meta Platforms META) would be the next big thing and decided to invest in that instead. Instead of finishing the 10-year stint with nearly a $65,000 position in LOW that pays him over $1,000 in dividends per year, this investor now has a $55,000 position in META that pays him nothing.

Though I am picking and choosing stocks for this scenario, it clearly demonstrates that the early emphasis on dividend growth provides a greater return and a stream of cashflow to rely on in retirement.

Some of the popular growth names would have caused you to lose money over that 10-year time frame (think Achillion or Blackberry). Others produced lesser gains like Google and Apple. Others barely outperformed like Amazon and Microsoft. Only a handful really took off like Netflix and Tesla. However, are you confident that 10 years ago you could have picked Tesla while you risk accidentally picking the Blackberry? And are you confident that you could make that same decision today?

Dividend Dollars Strategy

While it’s hard to pick the next Tesla, it is not hard to pick stocks that pay consistent dividends, grow them, and have potential for future growth. As I said before, my strategy incorporates aspects of traditional dividend investing, value investing, fundamental analysis, and growth investing. I look for stocks of companies that pay dividends consistently, grows them consistently, appears to be undervalued (using a handful of techniques), and looks to be successful over the long term.

10 years ago, Lowe’s already had nearly a 50-year streak of paying and growing dividends, they had good financials, a growing P/E and a growing EPS. Fundamental analysis shows that the company has value, value that may have been overlooked in 2012 depending on what quarter you look at. From a value standpoint, 2012 had some dips in the stock price that would have made sense to buy. From a dividend standpoint, Lowe’s already had great history of payments that would make any income investor feel fuzzy inside. Overall, there was nothing fancy about them back then, and there is still nothing fancy about them today.

In conclusion, it is much easier, and much safer to take the road less traveled as a young investor. Achieving long term wealth is much more realistic when considering the compounding opportunity that already successful and healthy companies can offer you.

Young investors should not feel obligated to follow the conventional advice of pursuing high growth investing or risk day trading. Taking on excess risk with goal of achieving wild returns might not materialize. Even though they have the time to recoup those losses, they may not be able to avoid the consequences of lost time for compounding.

Here at Dividend Dollars, I am a young investor trying to avoid just that. I invest in safe dividend paying companies that long-term have the greater potential support me in retirement and may even help me retire early! I have educated myself and built a sensible long-term strategy and highly encourage you to do the same.

This website is here to help you do just that by following our posts which include weekly portfolio updates, market analysis, occasional stock due diligence articles and the shared investing resources to give you all the tools you need to start!

I am also open to conversations to help! Comment below or reach out to me on my socials if you ever need anything.


Dividend Dollars


Dividend Portfolio: 2/25/2022 Week in Review

Welcome back to Dividend Dollars!

The market ended green this week after clawing its way back from an initial sell off due to worsening Russia-Ukraine concerns then switched to an optimistic rally led by the thought that the situation won’t have a substantial impact on the economy.

8 of the 11 S&P 500 sectors ended the week positive led by the defensive health and real estate sectors. A couple of our positions benefited from this movement!

Portfolio Value

To date, I have invested $6,750 into the account, the total value of all positions plus any cash on hand is $6,966.50 . That’s a gain of $216.50 for a total return of 3.21%. The account is up $38.02 for the week which is a 0.55% gain.

We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is down 1.59% whereas our portfolio has an over return of 2.5%! Let’s keep up this good progress with smart adds to the portfolio.

We added $465 to the account this week. A significant chunk of that money added was put towards adding buys in BBY and CMI, both of which were part of my stock picks for this month. The other trades I made will be detailed below.


Above is a dashboard of the portfolio as tracked through I use that site for tracking forecasted dividend income, yield, annual income, beta, dividend growth, and more.

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week. Usually, a chunk of my buys throughout the week are buys from my monthly stock picks. You can read about February’s stock picks here. I use a stock screener to find potentially undervalued stocks with safe and growing dividends. All stock picks (for this month and previous months) are highlighted in blue.

This week our activity raised our annual dividend income by $7. Our dividend yield decreased by 0.19% and our beta increased by 0.06. My portfolio’s dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which help me realize the benefits of compounding sooner. Our beta usually hovers right around the mid 0.6s which I like, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the chart below to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio.


This week we no dividends

Dividends received for 2022: $38.71

Portfolio’s Lifetime Dividends: $61.63


Here’s the breakdown of the trades I made this week:

  • February 22nd
    • BBY – added 0.3 shares at $92.57
    • CMI – added 0.15 shares at $216.27 (new position)
    • BBY – added 0.2 shares at $90.55
    • MMM – added .1 shares at $147.10
    • HD – added .1 shares at $315.60 (new position)
  • February 23rd
    • XYLD – added 0.211615 shares at $47.26 (recurring investment)
    • SCHD – added 0.131372 shares at $76.12 (recurring investment)
  • February 24th
    • HD – added
    • CMCSA – added 1 share at $45.08
    • T – added 1 share at $22.90
    • REYN – sold position, 3.03106 shares at $28.70
    • TXN – added 1 share at $163.23
  • February 25th
    • EPD – sold position, 6.113137 at $23.90
    • MSFT – added 0.5 shares at $295.58
    • UWMC – added 9 shares at $4.32

Noteworthy News

This section of the post will identify some headlines that may be of import to our positions. If they are important enough, we will also call out in the posts if the news calls for actions to readjust our portfolio.

I just came back from a weekend of camping and was not watching/taking notes of news on our positions, so comeback next week for some better input!


That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!

Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!

Thank you for reading! See you next week!

Net Worth Welcome

Net Worth – Oct 2021

As the second post of the Dividend Dollars blog, I think it is a good idea to establish a baseline of where we are starting and what better way to evaluate how close one is to financial success than determining one’s net worth?

You may wonder “why not just watch and evaluate the portfolio”? We will be reviewing and evaluating the portofio regularly on this website, however, the answer to the question lies in our website’s tagline: “Finding Reliable Financial Freedom”. Having financial freedom means different things to different folks, but for me it means being able to live the lifestyle that I want to live without needing to worry about money because your money is working for you.

In order to have your money work for you, you need to do more than just invest it. You need to be responsible with it. What good is a stock portfolio that provides you with a regular cash flow when that cash flow is eaten up by bad debt and interest owed? Calculating your net worth is a great way of checking in on that difference between your assets and liabilities in order to understand how responsible you are being with your finances. The more responsible you are, the easier it will be to reach financial freedom because you’ll be reinvesting dividends, you’ll continue to save money and invest it in your portfolio, and you’ll prioritize paying down costly debts.

Photo by olia danilevich on

October 2021 Net Worth: $106,675.50

We are just over $100k! Coming out of college and the pandemic, I’ve truly been employed for only a little over a year. Within that year I made a pretty aggressive investment and purchased a house which had caused me to expect my liabilities to eat up my assets more than it did. This number has pleasantly surprised me and I am excited to put efforts towards growing it while also documenting those efforts on Dividend Dollars.

Now that we have a baseline set, we are ready to experiment with developing a portfolio and chasing financial freedom!

Let’s dive into how Net Worth is calculated. It really is a simple formula, it is all of one’s assets less all liabilities. The answer to that formula gives us a solid understanding of where we stand financially at this moment. Tracking your net worth regularly also helps you know if you are trending in the right direction. It does not, however, give any information into how you got to that number, but we will explore that pursuit in other articles throughout this website.

Below is my calculation broken out.

Assets: $427,437.78

This is the total value of all of my assets which includes my home, investment accounts, and a few other various assets.

Home: $408,600

In February of 2021, I purchased my first house at the age of 23. The house had appraised for $350,000 but through a lucky situation and some very clever negotiating help from my mom (thanks mom), I was able to buy the house with a sales price of $335,000. Zillow currently, estimates the house is worth $408,600 which is where I pulled my value from. That is a 16.7% appreciation in less than 8 months! Even if I were to not use the Zillow estimate (which is fairly accurate) and instead used the appraisal value from time of sale, my net worth would be $48,075.50

Cash: $5,707.63

This value is the sum of my savings and checking accounts. I use this cash for paying bills and making purchases. My goal with the cash value is to slowly but surely increase it to an amount that can cover all of my living expenses for 4-6 months so that if a disaster (say loss of a job or a medical issue) were to ever happen I would have ample money to pay for expenses while trying to get things back to normal.

Taxable Investment Accounts: $829.2 (+0.46%)

This value is the sum of two different investment accounts. It has a modest gain of 0.46%. These accounts are fairly new for the purposes of beginning Dividend Dollars.

The first account is my Robinhood account which is where I am housing the dividend portfolio that will be tracked and experimented with throughout this blog. I know that the trading community hates on Robinhood for their controversial part in the WallStreetBets situation, but I like to use it because it is the best and simplest platform for dividend trading. We won’t be buying and selling stocks that often and Robinhood’s interface makes it super easy to track your dividends and your portfolio’s capital gains. If you do not yet have a broker account set up, I recommend starting with Robinhood. Feel free to use my referral link and we will both get a free stock.

The second account is my Acorns account. I have used Acorns for years as a way to automate investing and it is a cheap and reliable way to do so. My Acorns account used to be pretty substantial and had nearly an 18% gain right before I withdrew the funds for study abroad expenses. I have recently reopened it and am auto-investing every week. It costs $3 a month (it is free to students), you can set up recurring investments and invest your spare change through auto-roundups in order to easily take advantage of smart dollar cost averaging on their selection of diversified portfolios. Acorns is a great way to start investing on top of using your broker for your personal portfolio. Again, feel free to use my referral link which gives us both a free $5 dollar investment into an Acorns portfolio of your choosing.

Retirement Accounts: $2,615.95 (+20.09%)

My retirement account is provided by my employer. I have contributions set up to both a Roth IRA and a traditional 401(k). I focused on selecting low cost funds and ETFs for these accounts in order to most efficiently appreciate my contributions.

Other Assets: $9,685

Under the other assets category, I will sum up the value of all items I own that could be readily sold. My vehicle, which is paid off, is my only other asset with value that hasn’t already been listed.

Liabilities: -$320,762.28

My liabilities consist of one large debt, which is my home mortgage.

Mortgage: -$320,762.28 @ 2.65%

I generally follow financial responsibility guidelines set by people like Dave Ramsey. These guidelines include paying off all debt, having an emergency fund, investing a percent of household income in retirement, saving for large future expenses, paying off your home early, etc. I stick to most of these rules, all except paying off the home early.

With mortgage rates as low as they are, I believe it is more beneficial to invest extra funds rather than put those extra funds towards paying off the house early. If I can earn a profit greater than 2.65% on my investments, then that money is worth more if it is invested rather than putting it towards the house in order to pay less interest on my mortgage.

This isn’t to say that I won’t ever put any extra funds towards my mortgage, I do plan on paying extra when situations like job raises and bonuses occur. However, for the most part I plan on making my regular mortgage payment.

Now take the total assets and subtract the total liabilities and that is how you get your net worth. $106k is where we lie for October 2021. This will give us a good baseline number in order to track the progress of our finances and our investments. I’m excited to move forward with investing ideas and to regularly revisit the net worth calculation to see the results!

General Goal Welcome

Welcome to Dividend Dollars

Welcome to the first post of Dividend Dollars! Let me start by saying this blog and the strategy that I will develop through it is an experiment. I have no idea how this experiment will end, but I hope that it stumbles into success so that others can follow suit.

Don’t let that word “experiment” scare you. All of investing is an experiment. Every financial security you have ever bought in your life is an experiment and you the scientific method within that experiment even without you trying to. Step one in the scientific method is to question, as trades our question usually is “what stocks can I make money on?” and we begin to research stocks. Step two, we form a hypothesis that originated from that question. We pick stock A over stock B because our hypothesis is that stock A will be more profitable based on our research and ideas. Step three is the actual experiment and testing of the hypothesis which is actually purchasing the stock. The experiment can succeed or it can fail and a good trader completes the scientific method by observing, analyzing, and reporting on the result.

Whether you have recognized this before or not, as traders we are very familiar with experiments. I personally spent 6 years “experimenting”. I went to college in 2016 for a Bachelor’s in Finance and throughout my studies I traded quite casually. After graduating in the summer of 2020, the COVID-19 pandemic had left me unemployed and I found myself with even more time on my hands to experiment. Soon after, I landed a job and started that fall and still traded throughout the day on the job. I have traded for over 5 years and throughout that time I had subscribed to every Twitter furu’s alerts, chatrooms, watchlists, etc. You name it, I did it. And not just with day trading, but I tried all the other popular methods as well like options trading, swing trading, momentum trading, etc. Not only did I try to find success through subscribing to and following the plays of popular traders on the internet, I also amassed a fairly large collection of trading books and have read them all.

“I failed! And that’s ok.”

All of my experimenting, and reading, and formal studies in finance has led me to become a well-educated trader. However, regardless of my knowledge and experience, in my prior 5 years of trading a never found consistent success. My account value started small, I ran into some beginner’s luck and some good plays and had nearly quadrupled my account and every trade since then has been a slow and steady decline to my balance.

I failed! And that’s ok. Here’s why. A study done in 2010 showed that pigeons understand probabilities better than humans. This experiment was ran using the Monty Hall problem which originated from the original host of “Let’s Make a Deal”. The contestants are presented with three doors and only one has a prize. After a contestant makes a guess on which door the prize is behind, Monty Hall would always open one of the remaining doors that did not conceal the prize. The player would then be given the option of staying with their guess or switching to the other door that remained. Most people stayed with their guess despite the fact that switching increased their chances of winner. The contestant is first poised with a choice where they have a 1 in 3 chance of being right. That probability does not change after Monty Hall opens one door, therefore their door remains with the 1/3 chance while the only other door left must now have a 2/3 chance of being right.

The scientists of this study tested six pigeons under the same circumstance. Pigeons were present with 3 small light bulbs. When the bulbs would light up, it indicated that a prize was available. A pigeon would then peck at one of the bulbs and it would turn off showing that it was the wrong choice, the other two bulbs lit up green. The pigeons were then rewarded when they made the right choice with the remaining two bulbs. In this experiment, the pigeons learned the best strategy, 36 percent of them switched answers on day one and 96 percent switched on day two. 12 undergraduate volunteers, however, failed to catch on to the best strategy.

Photo by Oleg Magni on

Why am I spewing on about pigeons you may be wondering. Because this is a probability problem. Trading is a probability problem. If we can get outsmarted by pigeons in a Monty Hall experiment, what makes you think we can fare any better in the market where the odd of being profitable are arguably lower than a 2/3 chance of being right? Some traders may argue that you can study fundamentals or technical charting or different set ups to better put the odds of success in your favor. While that argument holds some truth, you also need to realize that every trade is entirely 100% unique. If you were to buy an Amazon stock right now, the current chart set up, price, volume, market conditions, news headlines, company fundamentals and any other stock trait you can think of is wholly unique in this moment and never again will be and never was in the past identical to what it is in this moment. In the Monty Hall experiment, this was not the case, the scenario was the same every time and humans still lost to pigeons!

Correctly predicting and positioning on price movements for consistent and reliable gains in day trading, swing trading, scalping, etc. is extremely difficult. If you can do that, you are smarter than me, most other traders, and the pigeons from the Monty Hall experiment. If you can’t do that, you are in the majority with me. It is due time for me to stop trying predict short to medium term stock movements and instead focus on a strategy where the probabilities aren’t nearly as important.

That is where dividends come in. Dividend Dollars will focus on finding and investing in companies that offer stable and growing dividends while also utilizing some aspects of the trading methods I had experimented with in my last 5 years of trading in order to build towards a portfolio that provides a steady and reliable stream of income while also position the portfolio for capital gains through studying fundamentals, evaluation, and a small amount of technical analysis.