Fad diets and fad investing plans rarely work. They are primarily designed to separate you from your money and make the seller wealthy. Real wealth is built with sweat, equity and a sound financial plan. For most people fortunate enough to be born in the U.S., or any other industrialized country, they have access to the two main ingredients to achieve financial success: opportunity and time.
Unfortunately, very few people are able to take advantage of the situation enough to even build a secure retirement. The formula to building wealth is rather simple — spend less than you earn and invest the difference. Implementation is where many people come up short. With the right focus and some positive feedback, building wealth can be much easier than shedding the spare tire around your mid-section. Here's how to do it...
Have A Plan
Many people are putting money into various retirement vehicles, but they haven’t taken the time to envision how it is all going to come together and ultimately if it will be enough. We often will spend enormous amounts of time planning every detail of our vacation, but I have no idea what our estimated income or expenses will be when we retire.
As the old adage goes, "Everyone has a plan – failing to plan is planning to fail." Retirement planning does not have to be complicated, but not doing it will complicate your retirement. To help you start the planning process, take a look these FREE retirement calculators (Retirement-Calculator.xls [Excel] or Retirement-Calculator.ods [Libre/Open Office]).
Use Time To Your Advantage
Time is your most valuable wealth building asset. Everyone is born with it. Few realize its importance until they lose most of it. The asset is so valuable it can’t be bought. As a value/dividend investor, I have learned that time can cure many mistakes and provide enormous investment leverage.
When you are young time is your friend. It allows to recover from mistakes. It educates you and provides you with valuable experiences. However, time is a double-edged sword that can also work against you. It is easy to say, 'I will start investing tomorrow - I have plenty of time.' Time can also create a false sense of urgency -' I held this stock for over a year and its price has gone nowhere.' Use time to your advantage start young and be patient.
Dividend Stocks To Help Grow Your Wealth
A long-term buy-and-hold investing approach focusing on quality dividend growth stocks has provided the means for many investors to enjoy a comfortable retirement. If you start early enough, you will go beyond a comfortable retirement into the realm of building long-term wealth. For starters, you might consider these dividend stocks that have been rewarding their investors with growing dividends for 40 or more consecutive years, all with a yield greater than 3%:
PepsiCo Inc. (NYSE:PEP) is a major international producer of branded beverage and snack food products. PEP is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1952 and has increased its dividend payments for 40 consecutive years. Yield: 3.2%
Genuine Parts Co. (NYSE:GPC) is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products. GPC is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1948 and has increased its dividend payments for 56 consecutive years. Yield: 3.2%
The Procter & Gamble Company (NYSE:PG) is a leading consumer products company the markets household and personal care products in more than 180 countries. PG is a member of the S&P 500, a Dividend Aristocrat, member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1891 and has increased its dividend payments for 55 consecutive years. Yield: 3.6%
Emerson Electric Co. (NYSE:EMR) designs and supplies product technology, and delivers engineering services and solutions to a wide range of industrial, commercial, and consumer markets around the world. JNJ is a member of the S&P 500, a Dividend Aristocrat, member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1947 and has increased its dividend payments for 56 consecutive years. Yield: 3.4%
Johnson & Johnson (NYSE:JNJ) is a leader in the pharmaceutical, medical device and consumer products industries. JNJ is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company has paid a cash dividend to shareholders every year since 1944 and has increased its dividend payments for 50 consecutive years. Yield: 3.9%
If losing weight and building wealth were easy, there wouldn't be people wanting to sell you the secret. The first step toward success is deciding to take responsibility for our future. With a little planning, effort and the right dividend growth stocks, we can be well on our way to creating long-term wealth and building a secure retirement.
Full Disclosure: Long PEP, GPC, PG, EMR, JNJ. See a list of all my dividend growth holdings here.
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