Freedom doesn’t happen overnight and it doesn’t happen by accident.The truth is my decision to become financially free was a feel that gradually became an overwhelming desire. That’s when I started reading.
No one is born knowing how money works or the systems that are in place. Everyone has to learn about them. People can have natural talents like music or sports or humor. And those talents can make people a lot of money. But chances are they wont’t know how to grow that money and will give it to someone else to manage or they will blow through it.
Dividends grow you money.
You make money.
You buy stock.
You get paid over and over again.
One strategy for reaching your financial independence number is to buy enough dividend stock that it replaces your current income.
There are tons of stocks that pay regular dividends, increase their dividends over time or have a high dividend payout ratio.
A few stocks that have a high dividend payouts and I have invested in:
XOM – Exxon Mobil
T – AT&T
IBM – IBM
Be specific. In order to reach financial freedom figure out what you F-You money number is and then design a path to get there. If you choose dividend stocks to get there. Find those stocks that have a high payout ratio currently or dividend aristocrats that gradually increase their payout over time.
You care less about the actually price per share and more about the dividend payout. But keep in mind that you want to choose stocks that are going to be around for decades. It is always a good idea to diversify in the stock market. You want to have several different stocks to invest in, but not too many that you cannot keep up with.
The most important aspect of this strategy is time. Start as early as possible and keep buying over time.
Reinvest. Use your dividends to purchase more shares.
Once you begin your strategy the magic of compounding will begin and all you have to do is stay the course.