The most effective way of enjoying the benefits of dividend investing is to consider dividend growth investing. This is whereby you do stock analysis and only buy growing dividend stocks from various companies over time and then hold onto your investments for any period of time. Throughout this period, you will be receiving continually rising dividend income from the companies you have invested in. There are various reasons why this strategy is effective. First, this strategy simply gives you dividend income, which is essentially passive income. The passive income will exponentially grow every year and you will be able to build your net worth simultaneously over a long period of time.
You do not need to have many assets to build wealth. Wealth is all about generating significant amounts of passive income, which grow over time. By considering dividend growth investing, this will work for you in two ways. First, it will build your passive income. Secondly, it will build your overall net worth. Through dividend investing, this can prove to be more reliable compared to other investment methods. Dividend growth investing also requires minimal time and anybody with basic mathematics skills and enough discipline can perform it. Understand that dividend growth investing does not necessarily mean investing in dividend stocks that only pay high dividends.
This form of investing also means that investing in a company that grows its dividends every year. In fact, some investors only invest in dividend stocks that have low payments. This is because by offering low payments, a company is in a better position of increasing the dividend payment every year. Since you want to earn passive income, understand that any stream of passive income is ineffective if it does not grow. Therefore, you should invest in companies that increase their dividends every year in order to build an effective stream of passive income, which keeps on growing every year.