Dividends4Life: Retirement Planning Depends On When You Begin Your Dividend Income Strategy And/Or Your Beginning Portfolio Balance.

This article is a simplified step-by-step paycheck replacement procedure and can be used as a starting point to lead to your own personal retirement plan and finally to your investment selection. You need to find out where you are going first before selecting the type of investments to accomplish your final direction. I went through this process myself and have decided that HYI (High Yield Investing) will be the best investment style that meets my goals based on both years until retirement (3 years) and my portfolio size.

HYI method will focus on one variable and that is ROI (Return-on-Investment). In my example the 10% ROI is all I focus on and make sure each stock investment in the portfolio holds up to its income contribution otherwise it gets kicked off my investment bus and I find another. I do not focus on stock market price except when I'm in a buying mood. If you take a percentage (70%) of income generated by a portfolio and reinvest the remainder (30%) your high yield and zero growth stock selection will still grow the portfolio. Just like blue-chip DGI stocks a payout ratio anywhere between 60 to 70% will allow for continued dividend growth.

Source: Seeking Alpha

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