What you’re about to read is uncomfortable, shocking, and you might even wonder why I’m sharing it at all.
After all, it’s a bit embarrassing.
But it was a key step on my path to rethinking investing completely…
And creating the lifelong dividend income strategy you’ve been seeing these past few days.
It’s Tim Plaehn here, by the way. Lead Income Analyst at Investors Alley and Editor of The Dividend Hunter
While I don’t cherish the memory of what I’m about to tell you…
I’d rather you learn from my stories than rather live through its lessons. Like I had to.
I Learned the Secret to Never-Ending Retirement Income the HARD Way
See, after my time in the Air Force, and then as a stockbroker and financial advisor, I found myself confident enough to take a stab at living and working overseas. I moved to Uruguay with plans to start a little business, make some income, and enjoy a relaxing life.
While there, I bumped into many wealthy folks. These were people who could buy 6-figure homes by the water…
Paying with cash…
Without breaking a sweat.
They enjoyed hearing my stories from the Air Force. I enjoyed their stories on how to build wealth.
So as you can imagine, we would stay up late swapping stories over whiskey.
Turns out I had a lot more to learn than I thought…
See, my mindset at the time was this: work, save part of your salary, then retire on what you saved.
After all, it’s what we’re all taught from the first day of our first job, if not before.
Think of it like this: Imagine a guy named Ned who grew trees and made a living off cutting them down and selling them for wood.
During his working years, Ned plants and nurtures the trees, cutting some down to sell so he can live, but saving most of them for later.
Then, when Ned retires, he stops planting trees. After all, he’s retired! Instead, he starts cutting the trees one by one…
Living off the income…
Hoping he won’t run out of trees (assets) before he passes.
Sound familiar? That fear of running out of assets in retirement, it’s real.
I know. I’ve felt it.
Not only that, I did run out of money.
That’s right. One day in Uruguay, I found myself broke.
Broke overseas. In a country where English isn’t that common. No family around. No safety net.
Like our fictional Ned, I cut down all my trees, while my work income dwindled.
I didn’t know what to do.
I remember sitting around with my wealthy friends, talking, asking them…
Not to ask for money, mind you…
But to get their take on where I went wrong…
On how to not just survive, but thrive and become rich like them.
One man – let’s call him Paul – was happy to give me some advice.
Now, Paul was not the flashy kind. I never saw him flaunt his money or be a jerk about wealth.
He leaned in close to me and shared the secret…
What was it? He said in a low voice…
“Acquire assets. Then, turn those freakin’ assets into passive income.””
It was a lightbulb moment for me.
Like Ned in our example, my focus at the time had been that income comes from work…
And retirement, I thought, is about drawing down your savings.
What Paul told me flipped that upside down.
Paul, like his rich friends, didn’t work for money. His money worked for him.
When I started studying the power of dividend stocks back in the States, I saw what he meant.
Let’s go back to our example. Suppose our tree-planter Ned had a neighbor, let’s call him George. Just like Ned, George too had a plot of land that he planted trees on.
But instead of cutting them down for wood, George planted apple trees – and sold the apples for money.
When it was time for George to retire, he stopped buying new seeds.
Just like Ned.
But George made sure to retire only when he could live just off of selling apples.
So as the years went on, and both Ned and George enjoyed their retirement…
Ned had to keep cutting down more and more of his trees to make ends meet. Eventually, he ran out of trees – and money.
But George, he kept having the same amount of apples to sell every year…
And never ran out of money. Even though his plot was many times smaller than George’s.
That’s where I’d gone wrong. I was Ned, selling down my retirement savings to live…
Meaning I ran out of savings way before I ran out of time.
My rich friend Paul, he was like George. He left his savings alone…
And lived off the dividend income his savings paid out.
Make Your Money Work for You
Take a stock like what I’ve mentioned to my readers before: Prologis, Inc. (PLD). Starting in 2011, your income would have shot up 203% in a few short years if you’d reinvested your dividends.
No job would allow you to triple your income that quickly.
Or take one of my favorites, Tallgrass Energy LP.
Since 2015, your income would have increased 612%. That’s like taking a mere $15,000/year income and turning it into $91,800/year!
All you’d need to do to make it happen is:
- Buy income-producing assets – high-yield, high-quality dividend stocks, in this case, and
- Hold on to them, and even double-down if their share price dips.
That’s it. You could’ve seen your income rise 203% or higher, as you just saw.
Think back to Ned and George. You want your portfolio to be like George’s apple orchard that keeps producing apples (income) without having to cut down any trees (assets)…
So you never end up without any trees at all, like Ned did.
The trick is picking the right dividend stocks. Ones with a high-yield without being high-risk. I know exactly how to do that.
And I want to show you, too.
It’s a proven method for more income during retirement. You don’t have to work for years, decades longer, hoping one day you’ll reach that “magical” $2 million savings mark.
Instead, make your money work for you.
Imagine every month having enough cash in your checking account to cover your expenses…
Your groceries, prescriptions, electric bills… anything you need.
Plus, have some left over to treat yourself guilt-free with eating out, entertainment, and travel.
You’re not rich per se, but you’re taken care of week-in and week-out.
No more avoiding the mailbox because of the “mystery” bills stacked on the ad pages.
Many might say that’s “complete and absolute freedom”…
All it takes is one stock – and following this plan.
