The Most Boring Investment Ever

Time and time again I hear the same thing from friends and family about investing the way that I do. Most of them ask me why I invest in “boring” dividend paying stocks when all of the money to be made is in the high growth stocks.

To be completely honest, they are right…sort of.

Some people do find the less volatile dividend paying stocks boring, I find them exhilarating! As you may have noticed, I’m a huge fan of cash flow. Cash flow is the ticket to play the game of life and dividend growth stocks will eventually allow me to play the game on my own terms!

Yes, it is a long road and the process can be uneventful at times. And no, I’m not going to get rich overnight. However, I also won’t go broke overnight and I am compounding my future cash flow with every dividend payment that is reinvested.

Yes, there is money to be made in growth stocks. There are actually a lot of people making a lot of money in high growth stocks. However, that just isn’t my style and I’m not ashamed to admit it.

I like to have cash flow back to me so that I can make the decision whether or not to re-invest it into the company. I also like the fact that I don’t have to watch the market every day to see if my “high-growth” stock has tanked and left me with nothing!

I have nothing against traders and I actually learn a lot of useful techniques from very good stock traders. However, I have recognized that over the past 14 years an investment in the S&P 500 would have you receiving all of your original investment back just in dividends.

So I guess one could say that dividend stocks are boring, but I’ll give you one more thought to ponder before I get off of my dividend paying soap box!

Take a boring old dividend paying stock — or at least one that seems that way — paying 5% in dividends yearly and racking up a conservative 5% in capital appreciation. Begin with $1,000 and reinvest those dividends. After 30 boring years, you’ll possess a staggering $18,700! (Let’s multiply that number by 10X for a more realistic example)

$187,000 How boring is that?

5 comments

  1. thats really boring!

    historically stocks that pay a dividend outperform non-divi stocks.

    so after 30 yrs, your boring investment should have outperformed the exhilarting roller-coaster tech stocks!

  2. The best feeling for a dividend investor is when he/she received a big fat dividend check for the investment that they made a while ago. The work was done once, yet the payments for work well done keep on coming.. How boring. I guess its more exciting to work overtime for a demanding boss in order to meet critical deadlines.. And when the company no longer needs you, guess what it’s going to do 🙁 Now that’s exciting 🙂

  3. Great article…I am trying to build a dividend portfolio over time and am looking forward to receiving those dividend checks over time…I will probably buy the DVY ETF once I complete a few of my blog goals

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