Editor’s Note: Today’s guest article comes from Chief Income Strategist Marc Lichtenfeld, who is celebrating a major milestone.
The third edition of his bestseller Get Rich with Dividends is now available for pre-order!
In this version, you’ll find…
- Never-before-seen data on how Marc’s 10-11-12 System performed during the volatile 2020 and recent bear market…
- New information on taxes, real estate investment trusts and a variety of other topics…
- A brand-new chapter on cryptocurrencies…
- And much, much more.
In his review of the book, Larry Kudlow, host of Kudlow on Fox Business Network, said, “This is the type of financial education you just don’t get in school.“
Our very own Alexander Green said, “To learn exactly how to build your fortune – safely and securely – invest in this book. It’s a classic.”
The previous edition won the 2016 “Book of the Year” award from the Institute for Financial Literacy. And it’s been published in four languages.
Quite simply, it’s a must-read for anyone interested in finance and investing.
Go here to pre-order your copy today!
– Nicole Labra, Senior Managing Editor
A friend recently told me his teenage daughter is getting interested in investing and asked for some basic advice.
A few hours later, another friend texted me, asking how he can “get rich with dividends.”
For people who have never invested, the markets can seem like a mysterious and intimidating force – one that can gobble up their money at any moment. But the fact is, investing doesn’t have to be complicated.
The secret to making money in the long term is extraordinarily simple…
Compounding.
When you invest and let your dividends and gains compound, the returns can be outstanding. To make it even simpler and easily digestible, I’ve created a strategy for selecting stocks in order to achieve excellent long-term results. It’s called the 10-11-12 System.
The goal of the 10-11-12 System is to generate 11% yields within 10 years if you’re collecting the dividends. If you’re reinvesting the dividends, we’re aiming for a 12% average annual total return over 10 years.
Twelve percent may not sound like much, but it more than triples your money in 10 years. And it grows your wealth by 10 times over 20 years.
A 12% average annual return beats the pants off the market and the overwhelming majority of professional money managers.
The 10-11-12 System focuses on investing in what I call Perpetual Dividend Raisers – companies that raise their dividends every year.
The strategy has three important components: dividend yield, dividend growth and time. To earn 11% yields and 12% average annual total returns, you need to invest in stocks with decent starting yields (usually 4% or higher) and strong dividend growth, and you need to stay invested for years.
The higher the starting yield, the lower the dividend growth can be and vice versa.
I caution investors not to go for the highest yields they can find. Companies with high yields can be very risky. We’re aiming for quality companies that have long histories of raising their dividends every year and will very likely continue to do so.
Investors collecting the dividends in cash will receive a raise every year. And if the companies boost their dividends by a meaningful amount, those increases should keep up with (or beat) inflation.
Investors who don’t need the cash right away should reinvest their dividends so that their investment compounds. The dividends will buy more shares, which will generate more dividends, which will buy more shares and so on…
At some point in the future, if the investor needs to collect the dividends instead of reinvesting them, all of those additional shares that were purchased will result in a higher cash payout.
Additionally, a company that is raising its dividend every year most likely has strong cash flows and growing earnings, which will result in not only higher payouts to shareholders but an increasing stock price.
The numbers can get quite large.
Ten years ago, I launched The Oxford Income Letter. I recommended Texas Instruments (Nasdaq: TXN). The stock has since returned 578%. A month later, I recommended Raytheon Technologies (NYSE: RTX). It has returned 439%. That’s the power of investing in Perpetual Dividend Raisers.
It all comes down to this…
If you want to make good money in the market, own quality stocks of companies that raise their dividends every year. It doesn’t get much simpler than that.
Note: I explain the 10-11-12 System in-depth in my bestselling book Get Rich with Dividends. The brand-new and fully updated third edition is now available for pre-order.
It’s an absolute must-read for anyone who wants to grow their wealth or prepare for retirement.
But don’t take my word for it. This is one of my favorite reviews – taken directly from Amazon…
I really want to thank this author for writing such a fantastic book. It is evident that he has many years of experience in this field, and knows what he is talking about. Every sentence he has said in this book struck a chord with me, and really made me stop and think about a dividend investing strategy. I am now super motivated to pick good companies that will pay me dividends as the years go by.
Click here to pre-order your copy today.