This is part three of a series on the long term benefits of dividend investing. If you’d like to catch up here are the other two posts in the series:
I have always wanted to own my own business. There is something exciting about building income from scratch or buying a successful business and trying to make it better. I used to say that for the most part I didn’t really care what the business was as long as it was something I could grow and improve while providing a service people need.
As time went by my thoughts have shifted a bit. Part of the shift comes from having a better answer for the question “What would you do if you had $10M?” My answer is now fast and easy – I’d be a full time dividend investor. Investing is something I am passionate about and enjoy doing. That does not mean I’d work 40 hours a week on research and investment. It would just simply be my only job because it is what I enjoy doing the most.
I’ve realized that the business I really want to own is a dividend business. As readers know it is something that I have started to work towards and plan on continuing to build for many years to come.
Build A Dividend Portfolio
Building a dividend portfolio is similar to building a business. It will take time and hard work to build up the portfolio – just like a business. Each investment will take careful planning and research. Understanding each company’s core competencies, industry, competitive advantages and future growth potential will take both time and skill. As time goes by I expect that I will develop my skills and become an even better dividend investor.
The portfolio (the business) will grow year after year and so will the income it produces. I’ll be reinvesting all of my profits back into the business to help it grow. Each stock that I add to the portfolio will be like opening another profitable location in my dividend business chain.
Retire with Benefits
Eventually this business will have grown to produce enough income that I can quit my regular full time job. This will happen only when the dividend income is significantly more than my annual expenses. I want to be able to continue to reinvest in my business so that there plenty to pass on for the next generation to manage. The biggest change in this stage will be that I can stop working at my regular full time job and truly be a full time dividend investor. This will also mean that I’ll be spending time training the next generation to manage this type of business.
Passing the Business To Family
The real end goal is to retire from investing with a very successful dividend portfolio. Hopefully it will be something I can pass on to my children for them to manage. Over time I plan to teach my children to be financially literate, responsible and skilled investors. If the business grows to what I hope it will say 40 years from now there will be plenty to manage. Only a skilled investor will be able to take it over. That does assume that my children will want to work in the family business. Time will tell. I’d hate to have to sell it off to a bunch of strangers.