Why a 3% yield is often better than an 8% yield

Hey everyone!

Most investors make a critical mistake when they start looking for income. They only look at the "Spot Yield." They see a stock paying 3% and think it is "too low" compared to a stock paying 8%. But if you want to build a Passive Income Generator that truly carries you for life; you have to look at Dividend Growth. This is the secret engine of wealth. It is how you end up with a "Yield on Cost" that makes your friends' jaws drop.

The Tale of Two Investors

Let’s look at two different strategies over a 10 year period:

• Investor A (The Yield Chaser): Buys a "stable" utility stock at $100 that pays a $5 dividend. That is a 5% yield. Ten years later; the company is still struggling to grow. It still pays $5. His yield is still 5%. His income has been eaten alive by inflation.

• Investor B (The Growth Strategist): Buys a high quality company at $100 that only pays a $2 dividend. That is a tiny 2% yield. But this company is a cash flow machine. It grows its dividend by 15% every single year.

Fast forward ten years: Investor B is now collecting over $8 per share in dividends. Because he originally bought the stock at $100; his "Yield on Cost" is now over 8.1%.

But it gets better. Because Investor B's company grew its profits to pay those dividends; the stock price didn't stay at $100. It is likely up 200% or 300%.

Investor A has a flat income and a flat stock price. Investor B has a doubling income and a massive capital gain.

The Pete Rule of Thumb 💡

I don’t just want a "paycheck." I want a "raise" every single year. When you find companies that can grow their payouts through recessions; high interest rates; and market crashes; you aren't just investing. You are building an automated wealth machine.

In my upcoming course; Dividend Market Genius; I am going to show you the exact "Dividend Growth" screeners I use to find these winners before the rest of the market bids them up.

If you want to learn how to pick the stocks that give you a raise every year; make sure you are on the waitlist. Waitlist members get the first look at the system plus that exclusive Founders Discount.

👇 Join the Dividend Market Genius Waitlist here: 👉 https://rebrand.ly/dmgwaitlist

Let’s build that automated raise together. 🥂 Stay tuned, I am finishing up the course. I think we are ready for February launch.

Pete
Invest with Pete

🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.