Dear DTA,
I want to make enough money to live on. I’m 82 yrs old. I know nothing about stocks, and I’m trying to live on Social Security. That is my situation in a nutshell.
-Jamie D.
Hi, Jamie.
It’s great to hear from you. We appreciate your readership.
I’m going to share with you some information and resources that I believe might be able to assist you.
In fact, I went zero to financially independent in about six years by following some of these guidelines, so all of this is coming from the heart.
However, we’re in vastly different situations. I’m almost 50 years younger than you are.
That said, core financial principles are ageless and timeless.
Let’s first tackle stocks for a bit.
Generally speaking, the older you are, the less exposure to stocks you’ll want to have. That’s mainstream financial advice.
But I don’t necessarily buy it.
Stocks are historically the best asset class. And high-quality US stocks are some of the best stocks in the entire world.
Just look to some of the elder successful and famous investors out there.
They don’t buy bonds or put their cash in the bank simply because they’re older. They know what works. And they know it works regardless of your age.
Stocks don’t know how old you are.
I’ll give you a great example.
Take Warren Buffett.
Practically all of Buffett’s wealth is tied up in Berkshire Hathaway Inc. (BRK.B) stock. And Berkshire itself is basically a collection of businesses and stocks. So he’s doubling down here at 88 years old.
We actually compile information on the common stock portfolio Buffett oversees. Check that out!
As aforementioned, I’ve personally used high-quality stocks to dig my way out of poverty.
But not just any stocks. There’s a particular investment strategy that I’m going to discuss with you.
I went from below broke at 27 years old to financially free at 33 by following the tenets of dividend growth investing. And I did it on a middle-class income.
My Early Retirement Blueprint lays out exactly how that happened.
What is dividend growth investing?
Fellow contributor Dave Van Knapp put together a robust guide that serves to educate investors on what the strategy is, why it’s so great, and how to successfully implement it.
You can access that content by reading his Dividend Growth Investing Lessons.
Suffice to say, the strategy is just like it sounds.
You invest in stocks that pay growing dividends.
Sounds simple?
That’s because it is.
After all, nobody should want to invest in a company that can’t pay a dividend because it’s not profitable enough to do so.
And nobody should want to invest in a company that doesn’t share its growing profit with its shareholders.
Dividend growth investing solves that, all while creating a fantastic source of passive income that one can use to pay their bills.
In your case, dividends could easily be used to supplement your Social Security income.
In my case, I use the five-figure and growing passive dividend income my FIRE Fund generates on my behalf to cover my essential expenses in life.
You can find more than 800 US-listed dividend growth stocks by perusing the Dividend Champions, Contenders, and Challengers list, which tracks stocks that have raised their dividends each year for at least the last five consecutive years.
That list, Jamie, is filled with blue-chip names that you’ll easily recognize. There are even a number of high-yielding stocks that would almost surely interest you.
Think AT&T Inc. (T), Realty Income Corp. (O), and Duke Energy Corp. (DUK).
It should be no surprise.
A company that’s able to pay growing dividends for years on end is often running a world-class enterprise.
We like to create fantastic, actionable content here.
And that’s why I highlight a compelling long-term dividend growth stock investment idea every Sunday.
That occurs via the Undervalued Dividend Growth Stock of the Week series.
A dividend growth stock shows up in the series only after it passes numerous quantitative, quantitative, and valuation hurdles.
We’re sharing vetted ideas. Free of charge!
However, there’s an old adage that often rings true:
You need money to make money.
Fortunately, many of the things we love to do can make us money.
This is money you can use to supplement your lifestyle. Or you can invest it.
Even though I’m officially “retired” in my 30s, Jamie, I still do productive things with my time. We all need a reason to get out of bed in the morning.
Well, that productivity can often be monetized. If you’re doing something worthwhile, there’s usually money to be made somehow.
So I’d think carefully about what you enjoy doing at this stage of your life.
And then think about how that enjoyment can translate over to a little extra income for you.
I’m a huge proponent of developing some kind of “side hustle” – a part-time, relatively enjoyable gig that earns some money.
With no career and Social Security, this might be your main gig.
And that’s okay!
I don’t know you. I’m not sure of your interests or abilities.
But I’m confident you enjoy a number of pastimes. And I’m sure at least some those pastimes could be creatively maximized for profit.
It’s not even necessary to be physically active. There are platforms out there that pay you just to take surveys or browse online.
There are so many income and investment opportunities out there for you, Jamie.
There’s never been a better time to be alive, or a better country to be in for these opportunities.
But it’s up to you to take advantage.
There’s no better time than today to get started.
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.