Got some investing money you’d like to double? As in, grow it by 100% or more? Here’s the surest and safest way to do it quickly.
Well, before we get into getting rich, let’s talk about income. Not everyone needs to grow their pile of money bigger and bigger. Some of us are done accumulating and are looking for cash flow to help us cruise through retirement.
So, we have two options:
Option 1: Invest for Income Today
Put some of the cash pile into safe funds and stocks. I can show you where to find 7.52% yields, which means you can build a “no withdrawal” retirement portfolio that spins off $75,214.44 on a million bucks:
Of course, few blue-chip stocks pay over 2%. So popular payouts won’t get it done. Fortunately, you’re talking to one of the guys who wrote the book on retiring on dividends! Our Contrarian Income Report portfolio pays 7.52% today–it’s doable to find these types of yields if you know where to look.
Option 2: Double Your Money Every Few Years (Also with Dividends)
Our strategy here is similar to our first one, except we are prioritizing tomorrow’s dividends over today’s. So, it is the trajectory of our payouts that is most important.
Why? Because stock prices tend to rise as fast as their dividends.
For example, PepsiCo
PepsiCo
And we can see that over the last ten years, its 107% payout growth has almost-perfectly predicted its 108% price gains:
PepsiCo’s payout growth has slowed in recent years as it’s filled the market for sugar water and salty chips. Sub-10% annual dividend growth does not get it done for true dividend growth investors like us!
PepsiCo’s best years of payout growth are behind it. Same goes for many other Dividend Aristocrats, the stocks that have hiked their dividends for 25 or more consecutive years. They are treated like royalty, so their valuations are always high and their current yields are rather low. And it doesn’t make sense to reward past accomplishments since the stock market is a forward–looking vehicle.
Which is why my Hidden Yields advisory focuses on stocks that are raising their payouts well more than average. I’m talking about 10%+ dividend increases year-over-year!
But, What About a Recession?
Our timely buys are a key ingredient in our secret sauce. And constant recession worries help us out.
Let’s rewind to April, when every contrarian indicator told us that stocks were ready to rally. While individual investors worried that a 6% decline would snowball into a 20%+ crash, we saw “dumb money” sentiment at extreme lows and smartly added dividend grower Amgen
Amgen
Amgen may not be a classic dividend stock per se, but over a long time frame, its price follows its payout higher like a devoted puppy dog. (Or an adolescent dog with the ability to focus more!) About a month ago, you and I considered the purple price line below, which wanders and then catches up with the dividend staircase:
The two ingredients created quite the cocktail—a quick 18% pop in Amgen’s price. And a congratulations to those of you who are sitting on these gains, which annualize to a terrific 204%.
What’s the Best Way to Increase Wealth Long-Term?
Several subscribers have written recently asking which dividend strategy is the best to increase their wealth over the long haul. That’s easy. It’s Hidden Yields and its 9.1%+ yearly returns.
At this rate, we’re doubling our money about every eight years (thank you, Rule of 72!). We’re doing it simply and safely, by buying the stocks that are increasing their dividends the fastest. And we’re buying without worrying about the bear market boogeyman that unravels most investors.
Remember, for us, pullbacks are buying opportunities. April sure was! Our secret was that we didn’t panic. We held onto our elite dividend growers and used the opportunity to buy Amgen.
Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: Your Early Retirement Portfolio: Huge Dividends—Every Month—Forever.
Disclosure: none
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