Here you will find an article explaining how to make money using a dividend growth investment strategy. It will be divided into sub-paragraphs, with each section clarified by a title expanding on the sections.

Branches of the Dividend Growth Strategy

This paragraph explains the core pillars of the dividend growth strategy, including building a portfolio of stocks in great companies that grow their earnings at a rate equal to or exceeding inflation, holding stocks for long periods to benefit from tax deferrals, diversifying investments across different sectors while considering dividends through real returns, and owning a portfolio of stocks from different countries to achieve currency diversity.

Striving for the Highest Flow of Net Present Value Earnings

This paragraph explains the concept of net present value and the importance of selecting stocks that excel in this area. A demonstrative example of two different companies is provided to show how to choose stocks based on net present value for greater future profitability. Additionally, the paragraph clarifies that there will come a time when excess funds resulting from the core business growth must be invested in the form of rewards for shareholders in the shape of dividends or share buybacks.

Growth as an Indicator of a Healthy Operating Environment

This paragraph illustrates the importance of choosing companies that achieve consistent growth in sales and earnings over consecutive years as an indicator of successful investment. It explains that a rising earnings rate reflects management’s confidence in the company’s ability to achieve more growth, and that a rising earnings per share rate is considered a positive signal from shareholders, indicating a healthy operational environment for the company.

Maintaining Your Passive Income Ratio

This paragraph explains the importance of generating passive income from dividend growth to keep more money in your pocket. It explains the difference between qualified dividend flows that are subject to a lower capital gains tax and those that are not, and also explains that stocks owned in regular brokerage accounts have a higher cost basis upon your passing and passing them on to your heirs, meaning that if you bought $10,000 worth of Starbucks and saw it rise to $750,000, your children would inherit it without paying capital gains taxes.

Frequently Asked Questions (FAQs)

This section answers some frequently asked questions about the dividend growth strategy, such as when to sell dividend growth investments and what the expected return should be when investing a certain amount in this type of stock.

Source: https://www.thebalancemoney.com/making-money-with-the-dividend-growth-investing-strategy-357877