Stay the Course: See Compounding Results in the Early Years of a Dividend Growth Strategy

Summary

  • I’m in my late twenties, and in the early years of my compounding journey with my dividend growth portfolio.
  • How do I stay the course in being invested and receiving a growing income while the market goes up and down everyday?
  • I have 2 spreadsheets to track my growing dividends. One for the anticipated dividends and another for the actual dividends received.

In the first 10 years, it’s hard to notice the effects of compounding. However, after that, it really starts to take off. A dividend growth portfolio could eventually run itself without you having to contribute new money if you employ an income growth strategy. That’s why it’s time in the market that matters. Time and the rate of compounding is what makes compounding work. Of course, contributing as much as you can regularly to the portfolio and buying what’s priced at a value matters just as much.

How I Stay the Course in the Early Years of Compounding

When I started using the dividend growth investing strategy, I didn’t expect it to be so slow in showing results. For example, on a given day, I only receive a $10 dividend pay check. I soon forget about it because it’s so small! You don’t feel the compounding until a decade down the road.

To see the compounding in the earlier years, track your dividend income. Personally, I keep a spreadsheet of all my holdings, and the annual dividends I’m expected to receive from each. At the bottom of the spreadsheet, I tally up the total dividends I receive. Here’s my example Google spreadsheet to track dividends.

See the full Seeking Alpha article on: Stay The Course: See Income Compounding Results In The Early Years Of A Dividend Growth Strategy.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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