"People, one of the tactics I used, one of several, is that I have been focusing on companies that have announced dividend increases. Every company that announces a dividend increase, I then look to the nearest dividend ex-date and I make a purchase in them. In doing this, I am picking up an extra dividend this year, as opposed to waiting ex-date and miss the dividend.
For example: If you own T and VZ, both have announced dividend increases for this year and you can pick up an extra dividend if you purchase before 7/9, the ex-date. Wait a week or two after that and you get one less dividend payment this year. I also want more of D but D’s next ex-date isn’t until September. So, I can purchase T or VZ, picking up that next dividend now, and buy D later because buying D now doesn’t provide the extra dividend. I added to them last month before the ex-date in order to pick up an extra dividend.
Every little thing supports the overall objective of the portfolio. You have to put all of the pieces together to see the full picture. I have announced every tactic and move made. Some people were able to put the pieces together and get it. Others isolated the pieces and can’t see the full picture.
I think part of the reason people don’t understand how I can show so much dividend growth without having new money go into the account is because their objectives are different from mine. My focus is income, their’s is growth and income, or just growth, thus they can’t relate.
I don’t focus on growth, I simply assume it will be there longer term. Their growth expectations are probably higher than mine as well. I only expect 6% growth compounded over the next 10-20 years. Since our primary objective of having enough monthly income generated for retirement, and a 100% margin of safety on that income flow, we don’t need high expectations going forward. Any growth we get will suffice as long as the income stream keeps rising.
Others might have to chase growth because they don’t have enough for a comfortable retirement, they need growth now in order to buy income later. This portfolio has passed that stage.
Where some in retirement are content with 6% dividend growth, I’m content with 6% portfolio growth along with double digit dividend growth.
If others were to look at their own portfolio, with a focus on income while keeping an eye on risk, they too could have some handsome income growth numbers. It all depends on what your priorities are and what you are willing to do."