Broker Check
The Greatest Dividend Money Can Buy

The Greatest Dividend Money Can Buy

August 17, 2021

Quote: “The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today.” If there’s a common denominator in happiness – a universal fuel for joy – it’s that people want to control their lives. The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.” Morgan Housel, from The Psychology of Money

Is that not what we are all after? Talk about freedom! It is so easy to become a slave to money and our time is spent pursuing more, more, MORE! But what are we really chasing? Inevitably we are chasing the freedom that money can provide. How we get there is important. I want to cover a few big ideas on ways to get to the place of financial freedom.

Spend less than you make, and do it for a long time.

The first may be the most obvious, but also the hardest to practice. You have probably heard someone in our office say it before, but the old adage “spend less than you make, and do it for a long time” is the basis for financial success. Many find themselves spending ALL that they make in order to come across to others that they are financially successful. Sure, it may look nice, and feel good for a few fleeting moments, but are you truly building wealth?

I can’t tell you how many times I have come across clients who have lived well within their means for their whole life and can retire with more money than they need and enjoy the lifestyle they have always dreamed of. Being content is one of the hardest things to do in our society. But, being content and living within your means can help you build that wealth and ultimately control your life and not be a slave to the next dollar.

Be Content

Another way to be content is with your investment returns. There is one thing I can tell you: there will ALWAYS be a better investment out there that is returning more than yours are. But, if you go chasing returns you could find yourself losing more than you wanted to. Sure, it would be great to pick the right stock at the right time and see it sky rocket, but we all know the chances of that are slim. Instead of aiming for the fences every at bat and whiffing the majority of the time, why not swing to get on base and slowly chip away at getting home.

Why not look at your situation and determine what returns you need to accomplish your goals. This is where financial planning comes in to play. If your financial plan shows that you only need a 5% return on average over the next 20 years, why would you add more risk to your portfolio for a chance to get 10%?

One of the most important parts of investing is the importance of compounding. By consistently adding to your investments and staying invested over time, you unleash the power of compounding. Unfortunately, there are two things that can make this difficult: fear and greed. Fear creeps in when markets are going down or there are scary things going on in the world that makes you want to pull your money out of the markets. Greed comes in to play when the markets are going nowhere but up and your portfolio returns are lagging. By either chasing returns or pulling out at the wrong time, you can find yourself worsening your returns over the long term. Ideally, you will find a good diversified mix of investments that meet your risk tolerance and financial goals and you stay invested and rebalance as needed.

There is no “perfect” way to build wealth. Every situation is different. But, I think we can all agree that if you can get to the place where you have enough money to be able to do what you want and not feel anxious about the money running out you are in a good place.

 As you know, we are in the business of helping these dreams come true. We want your money to match up with your dreams as much as you do.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.