Dear DTA,

I just want to make my money work hard for me in retirement!

-Bobby D.

Thanks for writing in to us, Bobby. It’s great to hear from readers like you.

You’re definitely not alone in regard to your goal. I think most people want their money to work hard for them in retirement.

After all, it’s a lot nicer to have your money work for you than your body work for you.

Money works 24/7. Never calls in sick. It can work harder, faster, and smarter than any human being.

And so it makes sense to unleash that kind of power and proficiency as much as possible.

When I write these words to you, this isn’t coming from some anonymous writer with no stake in the message I’m typing out.

I found myself broke and unemployed back in mid-2010.

But I had a similar goal as yourself – except I wanted to make my money work hard for me right away, and I wanted to retire from my day job at a much, much earlier age than most.

Well, by dedicating myself to the cause, I became financially independent in my early 30s.

This happened by embracing frugality, living below my means, taking on every additional income-production opportunity available to me, and investing my excess capital into high-quality dividend growth stocks.

This process allowed me to build a real-money, real-life dividend growth stock portfolio that generates five-figure passive dividend income on my behalf.

So I know a thing or two about money working hard for me in retirement.

My money is working extremely hard. And it allowed me to “retire” decades before most people.

And there’s nothing stopping you from putting yourself in a similar spot.

Now, you’ll have to generate some money to start with. You can’t invest what you don’t have. And money can’t go to work for you if you don’t put money to work.

That means you may have to make some lifestyle changes.

But a little short-term sacrifice is worth the long-term reward.

No pain, no gain.

Once you have some capital to work for you, it’s time to put it to work.

It’s at this juncture that I must note that the dividend growth investing strategy is what I’ve personally used to become financially independent at such an early age.

As such, I’m an unabashed fan of the benefits of this strategy.

This investment strategy essentially involves buying (and holding for the long term) high-quality stocks that have lengthy track records of paying increasing dividends. And one buys these stocks at appealing valuations.

You can find more than 800 US-listed dividend growth stocks by pulling up David Fish’s Dividend Champions, Contenders, and Challengers list, which is an incredible and invaluable compilation of stocks that have paid increasing dividends for at least the last five consecutive years.

Many stocks on this list are blue-chip stocks that represent equity in some of the world’s best and most well-known businesses.

Companies like McDonald’s Corporation (MCD), PepsiCo, Inc. (PEP), Exxon Mobil Corporation (XOM), and United Parcel Service, Inc. (UPS) are just a few examples of global high-quality businesses that pay their shareholders growing dividends.

A great company becomes great when it’s able to routinely and regularly increase its profit. Regularly increasing profit is a byproduct of running a strong business, generally speaking.

If you’re able to demonstrate an ability to grow your business year in and year out for many years, you’ve earned a certain level of quality and respect.

Well, any publicly traded company is owned by the collective shareholders.

And so any profit a publicly traded company generates is technically the shareholders’ money.

A dividend is really just a portion of the profit a company earns. If a publicly traded company earns a sizable profit, the shareholders should expect their fair share of that profit.

As that profit grows, so should the dividend payout.

You can even look at it in reverse, as a demonstrated long-term dividend growth track record is often a pretty good litmus test of business quality, due to the dynamics just laid out.

This investment strategy is wonderful because it’s just a tremendous way to get your money to work hard for you, which is exactly what you (and I) want.

As you can probably surmise, the best businesses in the world are surely much better long-term investments than average or poor businesses.

As such, it should be no surprise that research has shown that dividend payers and growers tend to outperform the broader market over a longer period of time (per Ned Davis Research).

My favorite aspect of this investment strategy, though, is the way in which my money works for me.

I can live off of the totally passive dividend income, which itself is funded by the growing profit the companies I’m invested in are generating.

I don’t have to sell a share to collect investment income and pay my bills. I can live off of the dividends alone.

And check this out.

The dividends are deposited into my brokerage account with no work on my part. So when I say my money works for me, it truly does everything. I don’t even have to worry about tracking it or lifting a finger in order to collect income from all of the work my money does for me. Nor do I have to worry about what’s going on with the stock market.

Plus, since I’m not selling any shares, my wealth is also growing as these companies increase their profit and become worth more in the process.

Dividend growth investing is a phenomenal investment strategy that’s perfectly suited to your goal.

Of course, this doesn’t mean it’s a particularly good idea to buy random dividend growth stocks at random times.

But we’ve got you covered here.

First, fellow contributor Dave Van Knapp has outlined exactly how this strategy works, why it’s so amazing, and how you can successfully institute it in your own life via his lengthy series of “lessons” on dividend growth investing.

Once you feel a little more comfortable with exactly how all of this works, and once you have some capital to put to work, I personally highlight what appears to be a compelling long-term dividend growth stock investment idea each Sunday as part of the Undervalued Dividend Growth Stock of the Week series.

Your money can work very hard for you, Bobby.

But you have to accumulate some money and actually put it to work.

You’ve got some excellent resources here to help you do just that, but you should want to get started right away.

I wish you luck and success.

Jason Fieber

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Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.