In the world of dividend growth investing and financial freedom, a subscriber asked how much money I like to personally invest at a time. The subscriber wanted to know whether I make larger lump-sum investments (to minimize fees) or whether I dollar cost average into the stock marketing (making smaller, periodic purchases).
To answer this question, I went into my personal stock portfolio, and looked through years of data. In analyzing my data, some unique trends emerged. While I have made some larger single purchases (one was $10,000 at a time), most of my purchases have been smaller, incremental purchases of $1,000 or less. In fact, a huge number of buy orders were in the $200, $100, and even $50 range. Given the size of my portfolio, the data really amazed me!
The moral of today's story: Dividend growth investing does not require large, lump-sum investments (large buy orders). Dollar cost averaging over time works just fine. I am living proof that dollar cost averaging with smaller amounts can add up to a sizable portfolio and stream of passive income.
Personally, I love dollar cost averaging because one can do this with dividend growth investing. Not all investments allow this type of buying. For example, I've made some angel investments that have required higher lump-sum investments. Because I'm able to dollar cost average with dividend stocks, I fully take advantage of this strategy. More than anything, it keeps me in the game and keeps me focused. The strategy requires decades to fully materialize. The incremental buy orders keep me focused on the goal at hand.
I also want to take the opportunity to wish everyone a happy holidays and prosperous new year! This is the season of giving. If you're a dividend growth investor (like myself), you are very fortunate. In today's video, I share some charitable donations that my family and I have made this holiday season. I challenge everyone out there to give back this season. Everything counts, and there is no gift more exciting than the gift of giving.
Disclosure: I am long Kimberly-Clark (KMB) and I am long Starbucks (SBUX). I do not own Wells Fargo (WFC).
Disclaimer: I'm not a licensed investment advisor, and today's video is just for entertainment and fun. This video is NOT investment advice. Please talk to your licensed investment advisor before making any financial decisions.
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