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livingdebThere is a subgenre of personal finance bloggers who espouse working toward financial independence by living on a small amount of their income and throwing every cent they can into dividend growth stocks. These are stocks that pay a dividend and where the dividend is expected to increase every year, generally because it has already done so for several years (or decades) and the company's finances still look good.
Every time you buy another stock, you've got some more of your money working for you. So you can spend less time working for money. They really like the idea of not having to cash in their stocks or even care about the value of their stocks--just the dividends. Once your dividend income exceeds your expenses, you're golden--dividends tend to increase faster than inflation (and faster than their raises at work). They like to say their stocks are working for them twenty-four hours a day, seven days a week.
On the other side, if you can learn to enjoy living on less, you can reach that golden point of financial independence earlier.
Of course they still have to do some work. If one of their companies stops paying dividends, they have to trade its stocks for those of one that is, etc. But that takes very little time compared to a traditional full-time job.
(If you want to read more about this, my favorite such blogger is Dividend Mantra.)
Meanwhile, I recently was singing along to Bachman Turner Overdrive's song "Taking Care of Business" (quietly, because I was in public) and decided that, with a few tweaks, it could be a theme song for these guys.
It's a catchy, fun oldies song, so if you don't know it, I recommend checking it out. (I'm probably biased--this is a song from my childhood. I remember taping it off the radio, hoping a loud truck would not go by while I was recording. And I listened to that tape so many times that I still expect to hear "Louie, Louie" next.)
The original lyrics are are probably making fun of people who think musicians don't have to have to work for their money. Or maybe the musicians really do think their work is play. I like the part where they say "Work out!" and then do a long instrumental bit.
The lyrics, with the tweaks to switch the meaning, are below:
Taking Care of Business
Dividend Growth Investors' Theme Song Version
You get up every morning
From your alarm clock's warning,
Take the 8:15 into the city.
There's a whistle up above and
People pushing, people shoving
And the girls who try to look pretty.
And if your train's on time
You can get to work by nine
And start your slaving job to get your pay.
If you ever get annoyed,
Look at me, I'm self-employed.
I love to work at nothing all day!
And I'll be
Taking care of business, every day.
Taking care of business, every way.
I'll be taking care of business; it's all mine!
Taking care of business and working overtime.
Work out!
Buy a dividend stock,
Then watch it start to rock
As it pays you every single quarter.
When the dividends increase
You will get a bigger piece.
Cut your costs and you can be a hoarder.
People see you having fun
Just a lying in the sun.
Tell them that you like it this way.
It's the work that we avoid,
And we're all self-employed.
We love to work at nothing all day!
And we'll be
Taking care of business, every day.
Taking care of business, every way.
We'll be been taking care of business; it's all mine!
Taking care of business and working overtime.
Take good care of my business
When I'm away. Every day! Woo!
You get up every morning
From your alarm clock's warning,
Take the 8:15 into the city.
There's a whistle up above and
People pushing, people shoving,
And the girls who try to look pretty.
And if your train's on time
You can get to work by nine
And start your slaving job to get your pay.
If you ever get annoyed,
Look at me, I'm self-employed.
I love to work at nothing all day!
And I'll be
Taking care of business, every day.
Taking care of business, every way.
I'll be been taking care of business; it's all mine!
Taking care of business and working overtime.
Every time you buy another stock, you've got some more of your money working for you. So you can spend less time working for money. They really like the idea of not having to cash in their stocks or even care about the value of their stocks--just the dividends. Once your dividend income exceeds your expenses, you're golden--dividends tend to increase faster than inflation (and faster than their raises at work). They like to say their stocks are working for them twenty-four hours a day, seven days a week.
On the other side, if you can learn to enjoy living on less, you can reach that golden point of financial independence earlier.
Of course they still have to do some work. If one of their companies stops paying dividends, they have to trade its stocks for those of one that is, etc. But that takes very little time compared to a traditional full-time job.
(If you want to read more about this, my favorite such blogger is Dividend Mantra.)
Meanwhile, I recently was singing along to Bachman Turner Overdrive's song "Taking Care of Business" (quietly, because I was in public) and decided that, with a few tweaks, it could be a theme song for these guys.
It's a catchy, fun oldies song, so if you don't know it, I recommend checking it out. (I'm probably biased--this is a song from my childhood. I remember taping it off the radio, hoping a loud truck would not go by while I was recording. And I listened to that tape so many times that I still expect to hear "Louie, Louie" next.)
The original lyrics are are probably making fun of people who think musicians don't have to have to work for their money. Or maybe the musicians really do think their work is play. I like the part where they say "Work out!" and then do a long instrumental bit.
The lyrics, with the tweaks to switch the meaning, are below:
Taking Care of Business
Dividend Growth Investors' Theme Song Version
You get up every morning
From your alarm clock's warning,
Take the 8:15 into the city.
There's a whistle up above and
People pushing, people shoving
And the girls who try to look pretty.
And if your train's on time
You can get to work by nine
And start your slaving job to get your pay.
If you ever get annoyed,
Look at me, I'm self-employed.
I love to work at nothing all day!
And I'll be
Taking care of business, every day.
Taking care of business, every way.
I'll be taking care of business; it's all mine!
Taking care of business and working overtime.
Work out!
Buy a dividend stock,
Then watch it start to rock
As it pays you every single quarter.
When the dividends increase
You will get a bigger piece.
Cut your costs and you can be a hoarder.
People see you having fun
Just a lying in the sun.
Tell them that you like it this way.
It's the work that we avoid,
And we're all self-employed.
We love to work at nothing all day!
And we'll be
Taking care of business, every day.
Taking care of business, every way.
We'll be been taking care of business; it's all mine!
Taking care of business and working overtime.
Take good care of my business
When I'm away. Every day! Woo!
You get up every morning
From your alarm clock's warning,
Take the 8:15 into the city.
There's a whistle up above and
People pushing, people shoving,
And the girls who try to look pretty.
And if your train's on time
You can get to work by nine
And start your slaving job to get your pay.
If you ever get annoyed,
Look at me, I'm self-employed.
I love to work at nothing all day!
And I'll be
Taking care of business, every day.
Taking care of business, every way.
I'll be been taking care of business; it's all mine!
Taking care of business and working overtime.
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no subject
on 2014-03-02 03:53 am (UTC)no subject
on 2014-03-02 05:07 am (UTC)Since you can really only receive about 3% of your money via dividends, you have to save a lot more than if you're going for the 4% rule.