What is the biggest obstacle in dividend investing once you get started?
At the beginning it is easy to think that the biggest impediment is the lack of sufficient funds to buy large amounts of stock that pay dividends. But.
After a few years, after one makes continuing investments, it be come clear that the biggest hindrance is not enough time. The more time one has, the eventual better results.
Time is what makes dividend investing so powerful. One invests some money, and then the dividends start to roll in. Of course, the more one invests, the more the dividend income. But the magic happens over time: Once the dividends compound, it is like a rocket ship taking off. The amount one accumulates can outstrip the amount one has invested, as long as there is enough time.
One’s assets grow together: the value of the portfolio, and the income it generates. Each dividend increases both the income received, and that income increases the size of one’s portfolio,
As often it is said regarding savings: the earlier one starts, the better off one is. To start before one is 20 is amazing, but none of the rest of us are Warren Buffett (a history of his early investing experiences is here). To start in one’s twenties is wonderful. The amount needed for financial independence grows as time progresses. So the earlier one starts, the easier it is.
Let those dividends pile up on top of each other!
But is is possible at almost every age to begin, and then to succeed. Even starting in one’s fifties or later is possible if one is motivated and disciplined, but time is shorter. So start early, persist, and don’t give up.
When did you start? You can let me know here.
The illustration of an oak tree named The Cowthorpe Oak, in Cowthorpe, near Wetherby, in Yorkshire, England, is from the 1830 book by Jacob George Strutt, entitled “Sylva Britannica, or Portraits of Forest Trees, Distinguished for their Antiquity, Magnitude, or Beauty.” Courtesy University of California Libraries. An interesting history of the tree can be found in Wikipedia here.
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