Are you ready to become wealthy and financially independent? Would you like to ensure that you maintain your financial freedom? Would you enjoy seeing your children and grandchildren obtain financial independence early in their lives, no matter what their career choices and no matter how many mistakes they make along the way? And, would you find satisfaction in the thought of your parents retiring without worrying that they may outlive their money?
If you have answered yes to any of these questions, you have come to the right place! The program you are about to read about requires NO financial planners, NO money managers, NO stockbrokers, and NO expensive mutual funds, or annuities. It doesn’t matter if you are 18 years old or 80 years young; nor, if you make $25,000 a year or $1,000,000 yearly, YOU hold the keys to your own financial independence!
You only need to do three things: (1) Open a brokerage account with a discount broker; (2) Pay yourself first at least 10% of your earnings; and (3) Invest that 10% in great businesses (DRIPs) that have paid and raised annual dividends each, and every year through recessions, depressions, and wars.
Regardless of what the pundits say, doing anything else is purely speculation and will delay your DRIP… DRIP…DRIP… to financial independence. Using Einstein’s Theory of Compound Interest, along with your own dedication, financial freedom is attainable in 10-to-15 years. DON’T WAIT TO BUY DRIPs!
The entire World has been turned upside down over the past three long years. But, in reality, there are worldwide disasters that occur in every decade. Let’s look at the generation that was born between 1900 and 1910. Those folks lived through World War I, the Stock Market Crash and Depression of 1929, World War II, the Korean War, the assassination of an American President, the Vietnam War, and the Cold War with the former Soviet Union (U.S.S.R.). Many great businesses survived and prospered during these unsettled times, continuing to pay dividends.
Dividend Champions (DRIPs) have paid and raised dividends each, and every year for 25 years or more. For example, Procter & Gamble (PG) has paid and raised dividends for the past 66-years; 3M Company (MMM) for the past 64-years; Johnson & Johnson (JNJ) for 60-years; The Coca-Cola Company (KO) for 60-years; Colgate-Palmolive (CL) for 59-years; Lowes Cos Inc (LOW) for 61-years; Wal-Mart (WMT) for 49-years; and McDonald’s Corp (MCD) for 47-years. At one time or another, these Dividend Champions were recommended as current buys, but today, they are overpriced, i.e., the current dividend yield is less than 3% at today’s prices. As of this writing, there are 133 Dividend Champions with many still overpriced despite a down market.
As of December 30, 2022, compared to the prior year end (2021), the DOW JONES INDUSTRIALS was down -8.78%; the S&P 500 down -19.44%; the NASDAQ was down by -33.10%; and the Russell 2000 was down -21.6%. I compared the prices of 50 DRIPs that we have recommended since 2016; these DRIPs also dropped in value by -8.57%, which is less than ALL the other stock market indices. HOWEVER, under the DRIP investment strategy, this comparison is not relevant. We are buying a passive income stream (dividends) that continues to increase each, and every year, even when the stock market crashes. FURTHERMORE, stock market declines work to our benefit since the dividends reinvested purchase a greater number of shares at lower prices, which results in an increasing income stream necessary to reach YOUR goal of financial independence.
Let’s just see where you could be with just one of our DRIP recommendations six years ago, Microsoft Corp (MSFT). In mid-to-late 2016, MSFT was trading in the $50 range; when I published The Best Kept Secret to Financial Freedom, MSFT was included in the Basic Portfolio at a price of $52.36 with a dividend yield of 2.75% (in most cases, a 3% or greater yield is preferred). At that time, MSFT had increased its dividend, on average, by 14.8% per year over 15 years. Had you bought 100 shares back then, it would have cost you $5,236. By the end of 2022 after six years, you would have received dividends of approximately $1,168 or a return of your original investment of 22.31%. The actual dividends paid would be greater; this computation assumes no reinvestment.
The MSFT share price on December 30, 2022, closed at $239.82 so your original 100 shares would then be worth $23,982; add the dividends of $1,168 and subtract your original cost, results in the value of your DRIP or MSFT stock on December 31, 2022, of $19,914 or 3.8 times your original cost in six years.
But you say, had I sold the stock a year earlier, when it was trading at $336.32 or $96.50 more per share, I would have made an additional $9,650 or $29,564; by continuing to hold through December 31, 2022, I lost $9,650! NO, you did not lose any money because you did not sell your stock. In addition, your reinvested dividends at lower prices resulted in a greater number of shares acquired, which increases your annual dividend income. And, over the past 10 years, MSFT has increased its annual dividend by 11.98%; from 8/18/2021 to 11/16/2022, MSFT’s dividend increased by 21.4%. REMEMBER, you are buying an income stream that is increasing each, and every year; with MSFT, that increase is between 10% and 12%, a real return on your investment. The icing on the cake is the increase in share value from $52.36 to $239.82 at the end of 2022. AND, based upon the history of the stock market, it is highly likely that MSFT will again reach its 2021 high of $336.32, and maybe higher. MSFT is a hold but not a current buy. Just continue to reinvest the dividends or live off them.
The DRIP to focus on for this week is Medtronic PLC (MDT), a Dividend Champion/Aristocrat, that has paid and raised its annual dividend for 45 years, on average, by 10.25% for the past decade; at a price/cost of $77.72 per share, the current dividend yield is 3.43%. BUY MDT NOW while it is currently undervalued!
For those new to the DRIP Investment Strategy, you are NOT buying a stock with the hope that the price will increase, and you can sell it for a profit, you are buying a passive income stream. If you continue to buy DRIPs like MDT, and reinvest the dividends, financial independence is within your grasp over the next decade.
Don’t be fooled by the continued propaganda leveled at you by Wall Street and the entire financial planning community. Take your financial future into your own hands! It’s easier than you can imagine.
Dum Spiro, Spero—While I breathe, I hope.
Slainte mhath,
Robert G. Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.