Dear Reader,

Back in my days as a fighter pilot for the U.S. Air Force, preparing and getting in the right mindset was a matter of life and death.

Literally.

The F-16s I used to fly have a maximum speed of over 1,000 mph, and a top altitude of over 50,000 feet.

That doesn’t leave a lot of room for error. If something goes wrong and you panic – that’s it. It’s over.

But if you keep your cool and channel your training, you’ll make it out just fine.

Dividend investing isn’t very different. Sure, the stakes are a bit lower – no single trade is a matter of life or death, as long as you make sure to spread out your investments.

Thank goodness for that.

But getting in the right mindset is just as important in dividend investing as it is when flying. In fact, you’ll be hard-pressed to achieve Dividends Forever without it.

Let me explain…

Land, Fly, or Die

First off, I’m no hippie. I’m not talking about any of that “if you just really, really want it hard enough, you’ll get it” stuff.

That’s BS.

Really, really not wanting to crash your F-16 won’t make a lick of difference to the laws of physics when something goes wrong.

No, when I say “mindset,” what I mean is how you approach events and react to them. If something goes wrong mid-flight, do you panic? Or do you take a deep breath, remember your training, fix it, and fly on?

After all, there only ever three options when you’re flying: you land, you fly, or you die. Whatever happens in the air, you still have to choose one of the three.

Personally, I prefer landing or flying to dying.

As an income investor looking to create a Forever Dividends portfolio, you’re actually in a similar spot. And you’re going to have to rethink how you react to stock markets, too.

Here’s what I mean.

Think Like a Business Owner – not a Stock Owner

As you’ll see starting May 2nd when we kick off the Dividends Forever Summit, the way to get “endless income” in retirement is to invest your nest egg in safe, high-yield dividend stocks with lots of room to grow.

That means we’re going to focus on a company’s dividends, and on whether they make enough money to pay and increase those dividends.

What the company’s share price does from day to day doesn’t matter. We’re in it for the dividends, not to sell the stock for more than we bought it for.

That’s a big mindset shift. Share price changes is 99% of what cable business channels like CNBC and Fox Business do! Yahoo! Finance, Marketwatch, or Bloomberg are the same – all they talk about is “this stock is up,” and “that stock is down,” and “these stocks will be up soon (but don’t quote us on it).”

But none of that matters. I don’t even look at share prices anymore unless someone asks me.

What matters is whether the company is still paying dividends, and whether there’s room for that dividend to grow.

If both are true, then you’re golden – and if the dividend stock is also falling in price, that means you’re getting a discount and should be buying more, not selling.

On the other hand, if a stock with a safe dividend and room for dividend growth is gaining in share price, then that doesn’t mean much at all. You should probably reconsider buying more of it, as the dividend yield goes down as the stock price goes up.

But the yield you locked in when you bought at a lower price is set. So you’re good.

Think of it this way: you’re not buying shares. You’re buying a business.

You’re buying a business so that you get paid part of its profits as its owner. And that profit doesn’t change just because the company’s share price changes.

Walmart doesn’t make less profit on selling frozen chicken just because WMT shares drop 1%. Netflix doesn’t suddenly make less money on video subscriptions because NFLX shares drop 2%.

Think like a business owner, not a stock owner, and you’ll have the right mindset to get your Forever Dividends portfolio.

And next time one of your dividend stocks starts moving several percent up or down, and you feel your heart start racing, take this advice from a retired F-16 fighter pilot:

Forget about CNBC and MarketWatch. Share prices don’t matter.

You bought the stock for its dividends, and if those dividends still look like they’ll be flowing then that’s all you need to know.

Because whatever is happening to the share price, there are only ever three options: you land your portfolio in a place where you get enough dividends to cover your expenses…

You keep flying, buying high-yield stocks with room to grow their dividends, until you can land…

Or you give up on dividend investing, sell your dividend stocks in a panic because they go down slightly…

Miss out on both future dividend payments from that stock AND on part of your initial investment…

And go back to chasing the “hot stock” of the moment, knowing your chances of success are tiny and you’ll always be two steps behind the hedge funds and investment banks.

Pick one. Personally, I still prefer landing or flying to dying. 

Land, fly, or die

Tim Plaehn

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