Dividend Growth Investing has been a revelation to me…
If my parents would have known about that strategy years ago, I would probably be retired by now. Unfortunately they didn’t. And school did not teach it to me either.
It actually took me at least 5 to 10 years (lost?) at reading tons of books about penny stocks, technical analysis, gap trading, channel breakout and what else before finally finding my St-Graal, the intelligent voice in the crowd. I don’t say that it is not possible to make good returns with these methods focusing on capital gains. But, I think they are very risky and the risk/reward ratio might not be worth it in many cases. Sometimes you can make a profit, but by subtracting commissions and the lost due to slippage your broker often ends up making more money then you with no risk involved…
Take the shortcut and read these books! You won’t lose your time. I promise.
Stop playing lottery
Stop playing lottery with you hard-earned money. Accept that there is no such thing as “quick money”. It is better to realize it sooner than later because the magic of compounded interests (and that’s one of the seldom real legal ways to make great returns) takes time to work.
If you lose 50% of you capital, you will need an investment that will give you a return on invested capital of 100% only to come back to the same position you were before… Do you know a lot of investments that are going to give you that kind of return? I know, it already happened in the past with Google’s stock or even Amazon’s stock and some other cool stocks. But who would be able to predict what will be the next Google? You might lose a lot guessing and pick all the wrong ones only to end up with no money for your retirement. It always looks easy afterward. But unfortunately, predicting future is not one of my talents.
Value investing offers sound advice. As Benjamin Graham said :
Investing is most intelligent when it is most businesslike!
That said, after reading these books, you will understand why so many “investors” fail in the stock market. It is simply because they treat shares as lottery tickets instead of treating them as part ownership of a business.
If you would have to feed your family, would you buy a business who runs at losses month after month to make a family income? Probably not. Then why would you invest you capital for retirement in a lousy business simply because others are doing so?
This is just a total non-sense! And the sooner you’ll realize it, the better and faster you’ll become financially free!
The father of value investing
Warren Buffett is the greatest investor of all time with a personal fortune evaluated at more than 55 billions and growing. But he had mentors and I think that you can learn a lot by learning from his mentors.
Benjamin Graham is known as the father of value investing. Back in the ’30 he was Warren’s teacher. Buffett credits him as grounding him with a sound intellectual investment framework.
I definitely suggest you read Ben Graham’s book The Intelligent Investor. Warren Buffett, in one of his letters to shareholders, specified that Chapter 8 and 20 were the most important chapters in the book. He also wrote that Ben’s book had been the most important investment in his life.
Ben also wrote, Security Analysis, one of the best book on the subject.
Done with these ones?
When a master in his art wants to show you how to do like him, shut up and listen! Warren Buffett his the world’s greatest investor. I know, I’ve said it before. But, he’s been able to achieve a growth equivalent to a 21% compounded interest investment for over 50 years!!! Not impressed? You should! This is how you turn 1000$ into 14 millions $ in 50 years. If you compare that to a 5% compounded interest bond, your 1000$ would be worth 11500$.
Warren Buffett didn’t write a book about how he did it. But he wrote letters to shareholders every year since 1976. Glad you are since you can have them for free on his company website. With more than 800 pages accumulated over the years, you’ll have plenty of great pieces of advice written by Warren’s hand. I think every serious investors on earth should take the time to read them carefully. A huge part of them are boring stuff, but there are diamonds in the rock in every letters.
Fortunately enough, if you prefer, and I suggest it because I did just both, you can read these two books about Warren Buffett’s investing method and how he slowly built his wealth :
These books will give you the core basis of value investing! With that new knowledge in hand, you should be in good shape to make better returns on your investments and understand why you should avoid investing in lousy (but sometime very popular) businesses. Because, as Warren Buffett said :
You will see who’s swimming naked when the tide goes out!
What he means is that in a bull market every stock can profit from the folly of the crowd. But in the end and over time there will be another bear market and stocks will end up at their fair value (or even get on sale – undervalued) based on their fundamentals. And those lousy stocks will see their price drop twice as fast as they went up! If you’re lucky enough, you will have sold before the crash! If not, then good luck!
I truly like Warren Buffett. In addition to being the smartest investor, he’s one of the funniest businessman I ever heard of. His letters to shareholders made me laugh so many times that I stopped counting!
Smart Dividend Investing
A great book from the guy at DividendLadder.com about dividend growth investing. If you’re starting with dividend growth investing or if you want to improve your skills, that’s the book to read!
He explains the power of long term dividend investing and show you how to pick and evaluate stocks, manage your portfolio and so much more.
Creating wealth with dividend growth : The single best investment!
Lowell Miller’s book is the best book I have read so far about dividend growth investing. He’s giving you sound advice and a simple 12 steps method to find stocks in which to invest to build a great compounding machine.
He also coined the following formula. This formula already gives you the framework of his dividend growth strategy :
High quality + High initial yield + High dividend growth = High total return
If you only have the time to read one book about dividend growth investing, then that’s the book to read.
Have fun reading! It’s going to change your life!
The strategic dividend investor by Daniel Perris
I just finished reading this book and I can tell you it just convinced me even more that Dividend Growth investing is the way to go to build wealth! Every dividend stock you own becomes a small compounding cash machine of its own! Add them up and you get an army of workers delivering growing cold hard cash to you every quarter! Dividend stocks are responsible for much of the real return of the stock market over time. If you are looking for a true “get rich slowly but surely” method then you might have found the best one at your arm’s length.
In this lost decade of tech stocks bubble, housing bubble and great market crash, there is one intelligent voice in the crowd and it is Daniel Perris. This book is a great introduction about dividend investing and why you should consider building a dividend growth portfolio.
Definitely a must read book!
The millionnaire teacher
this book is not about dividend growth investing. But it is a must read about the power of frugality and high saving rates at a young have. While there is no better moment than now to change your way of consumming and to increase your saving rate, if you would have started 10 years from now, you could now be retired using these simple techniques.
This is a best-seller and a book everyone should read! It teaches what school didn’t teach us and will give you a great mindset about how to become wealthy.
The 4-hour workweek
This book has inspired me this website! Truly! It is about evading from the traditionnal 9 to 5 job and enjoying life. There are a bunch of tricks and techniques plus a complete framework to optimize your way of making an income.
I still have to read that book again and again. There is so much in it!
If you are tired of your 9 to 5 job, this is the book to read. It talks about optimization of your life, about working from a laptop, about outsourcing time-consuming tasks abroad and how to do it (this really works and is at your arm-lenght thanks to internet) and about so much more.
The couple of dollars you’ll spend reading this book will be more than worth it!
That’s it? You read those books? Go to my dividend tools page.
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