The 3 keys to reaching financial independence are:
- Income
- Expenses
- Investments
Also read:
- Q2/H1 Hedge Fund Letters – Letters, Conferences, Calls, And More
- Baupost Letter Points To Concern Over Risk Parity, Systematic Strategies During Crisis
- AI Hedge Fund Robots Beating Their Human Masters
When the passive income from your investments exceeds your living expenses, you’ve reached financial independence.
The more income you make in a given month, the more you can invest for a given level of expenses.
The fewer expenses you have, the faster your investment income will cover your expenses and the more income you can save.
Most people have a fairly good understanding of the relationship between financial independence and income and expenses. The obviousness of this is below:
- Income (more is better)
- Expenses (less is better)
The internet is filled with ideas on how to cut expenses (couponing, downsizing, etc.) and increase income (side hustles, selling your excess possessions, how to get a raise, etc.).
The investment side of the equation is a bit trickier.
- Income – Expenses = Amount to Invest over a given time period
- Investment growth and investment yield determine how much you must (and for how long) before your passive investment income exceeds your expenses
I believe that dividend growth investing has a unique set of characteristics that make it ideal for both building wealth for the long run and generating rising passive income.
High quality dividend growth stocks tend to not have the highest yields – but they offer more in the way of safety and growth. Over longer periods of time, growth matters a great deal.
Dividend growth stocks provide the right mix of growth and income in one investment to match what financial independence is all about – rising passive income that exceeds your expenses.
If you are interested in a systematic way to find the 10 best high quality dividend growth stocks for financial independence every month, start your free trial of the Sure Dividend Newsletter here.
Thanks,
Ben Reynolds
Sure Dividend
