How to Get Rich With Dividends

by Alexander Green, Investment U Chief Investment Strategist

Wednesday, July 11, 2012

When I first got started in the investment business 27 years ago - as a novice stockbroker - I had an awkward conversation with a client.

She was an elderly, income-oriented investor with a substantial sum tied up in an oil stock with a fairly low yield. I suggested that she could do a lot better than the 2.5% dividend she was earning.

"Son," she replied - I had already come to recognize that it was likely to be a teachable moment, and an embarrassing one, when a more-experienced investor called me "son" - "that stock is paying 2.5% based on what it is selling for now. But for me, the annual dividend is more than my entire original investment."

Oh.

It was an early lesson in the magic of investing in blue-chip companies with steadily rising dividends. To this day, it still astonishes me how many investors - even experienced ones - don't realize what a powerful opportunity this is - or how cheap dividend payers are right now.