Dear DTA,
My goal is to retire at the age of 28. I am a 20 year old student, and I am willing to start my online business this year. Please, what are the best pieces of advice that you can give to a beginner?
-Sam S.
Hi, Sam.
It’s great to hear from you. Thanks a lot for writing in to us.
It sounds like we’re brothers from another mother.
I say that because I also started my online business back in my 20s, and I retired in my early 30s.
So I might just be the perfect person to write back to you and give you some advice.
Now, a lot of my advice is going to come in the form of links to more in-depth resources.
I obviously can’t explain everything in a short response, but I want to include as much information as possible here. Please take the time to follow up and read through these resources.
The first resource, which explains more about my situation and how I got there, is my Early Retirement Blueprint.
That’s basically a step-by-step guide to early retirement.
It’s something almost anyone can follow.
It includes the steps yours truly followed in order to become financially independent at just 33 years old.
A major component of that guide is the very investment strategy that I’ve used to build my FIRE Fund, which is my real-money stock portfolio that generates the five-figure and growing passive income I need to cover my essential expenses.
This is an investment strategy that I believe is perfectly suited for early retirement.
That’s because it basically limits you to only the best businesses out there, while simultaneously creating the robust and growing source of passive income you’ll need in order to cover your bills without a job.
That investment strategy is dividend growth investing.
It basically involves buying and holding equity companies that reward their shareholders with growing dividends.
These growing dividends are funded by the growing profit these companies are producing.
A lengthy track record of growing dividends is a fantastic litmus test for business quality.
After all, only a great business can produce the regularly growing profit necessary to support regularly growing dividends.
And growing dividends can serve as a phenomenal source of passive income.
Fellow contributor Dave Van Knapp put together an extensive introduction into dividend growth investing.
You can access that resource by reading through his Dividend Growth Investing Lessons.
Take a deep dive into that content. It’s great stuff.
Of course, you can’t invest money you don’t have.
So in order to get your hands on investment capital, you’ll have to put yourself in a position to make a good income and spend very little of it.
The aforementioned Blueprint discusses quite a bit about what I did there.
Interested in building an online business?
That’s great, but my advice would be to treat it as a side hustle. Not a main hustle.
Follow your passions and put your energy into something that might turn out great, but don’t be afraid to get your hands dirty, land a job, and pipeline as much cash as you can into your investments and future.
I currently live in Chiang Mai, Thailand where I’m living out my early retirement dreams.
This place is a bit of a mecca for “digital nomads”. These are entrepreneurs who build online businesses so that they can travel and do whatever they want.
Well, I have a secret to share with you.
Most of them apparently fail. Like, 99%. I’ve been living here for more than a year, and I can’t tell you how many people I’ve seen end up going back home because it’s actually difficult to make a lot of money online.
So just make sure you’ve got the income totally figured out.
Then make sure you’re able to live off of very little of it.
Lifestyle sacrifices are much easier to make in your early 20s than they will be 10 or 20 years from now, so take advantage of that.
You’re a college student now. Well, continue living like a college student straight through your journey to early retirement.
Keep your expenses low. Don’t let lifestyle inflation creep up on you. Keep your eye on the prize.
Delayed gratification is a powerful concept, but you’ll actually be hastening gratification when what’s truly gratifying to you is your freedom and ownership of your time!
It’s not what you make that will matter most. It’s what you keep that will largely impact your timeline to FIRE.
Once you get the income and spending under control, it’s time to invest your capital.
Fortunately, you’ll never be short on options.
The Dividend Champions, Contenders, and Challengers list contains invaluable information on more than 800 US-listed stocks that have raised their dividends each year for at least the last five consecutive years.
It shouldn’t come as a surprise that many of the companies on that list are world-class enterprises.
And if you’re careful with your money and invest it intelligently, you could own a slice of many of those fine businesses.
Also, I personally vet dividend growth stocks in order to provide compelling investment ideas for the readership.
I evaluate fundamentals, competitive advantages, risks, and valuation before presenting some of my best ideas every Sunday via the Undervalued Dividend Growth Stock of the Week series.
These are free high-quality ideas, although they’re honestly worth quite a bit of money.
It’s the dream to live off of dividend checks, Sam.
I’m living that dream now.
And I believe you can live that dream in a few years, if you’re serious about it and take the right steps.
Start taking those steps today.
I wish you luck and success.
Jason Fieber
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.