Friday, July 31, 2015

DGI Investing is "Boring"

Dividend Growth Stock Blog

When I started DGI investing last year in August, I was very excited. I read a lot of books and blogs and started to understand the basic concepts of yield, payout ratios, importance of EPS and its relationship with the PE ratios, FCF etc. Then, I created a new account and added my first shares.

This was a very exciting time indeed. While I had invested before (401k mutual funds) this was the first time I had full control.

After the first month, I started getting my first dividends. Boy, was I jumping up and down. I was getting paid for doing nothing.

I repeated what I did, and looked closely at the dividends income. Yes, my principle went up and down, but based on my experiments, my focus should be on the income. And, it should be growing.

And yes, it was growing. I essentially can control my future income - small steps at a time.

By March of this year, I invested almost $30k of fresh capital and getting more than $1k forward dividends income.

I had once commented on AdamIWTRS's blog that all you have to is to repeat this for 20 times. I wasn't joking.

Once you have a method to generate cash flow, there is no reason why you can't repeat what you're doing. Again and again.

So, I repeated my steps again. I saved harder and earned more (thanks to the inspiration from MyDividendPipeline's story from his past). I invested my extra savings.

After doing this a second time ($60k milestone, $2k income), I can see some repetitiveness to the process. I mean, the steps are the same. I just find good quality companies and reasonable valuations. Invest. Sometimes to average down (maybe average up in the future). Sit and wait. Review once a year.  Watch the income come in.

By the third cycle, I should hit $100k invested and $3k income. Using the same old 'boring' routine. Should this get boring?

Apparently, yes. Investing should be boring.

"If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring."
- George Soros

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
– Paul Samuelson

There's no reason why I can't repeat this 20-30 times. But why stop there? Why not 100 times? Boring, right?

Being boring is good. Being slow is good.

There's no magic. It's not rocket science. It's just time and patience - waiting for the law of compounding to work for you.

One thing I am noticing is that I am getting less excited about the market swings. Sure, I still check the prices, but it's less frequent now. Hopefully, by the time I repeat the cycle 5 or more times, I will care less on these things.

Don't get me wrong. I get very excited when I learn new things. And I think I will always learn something new in investing. Also, when you find a quality company that's undervalue then this always get the pulse going. It's like finding gold. Lastly I am very happy about getting paid for doing nothing.

So for me, it is okay that this will get boring. I will watch the income come in, keep learning and have fun at the doing the important things in life.

Is your investing style boring?



  1. I have been following hte DGI model for years and find it as exciting as ever. Am I doing it wrong? ;)


  2. Boring investment is good. When you get too excited about investing that's when you get into trouble.... just talk to any day traders.

    1. Thanks Tawcan.
      Definitely, boring is best.

  3. I agree with you that boring is best. Leave the excitement to the day traders. Slow and steady wins the race. Have patience and persistence and you will be rewarded from the magic of compounding.

    1. AAI, thanks for your support. Just let compounding do its magic.

  4. Thanks for the mention D4S!

    I think this is exactly the con (for some) about DGI, you build it slowly over time and don't get huge boosts in profit or income generally. It's exciting though when you look at the long term potential!

    1. No problem Adam. Love your blog!
      Exactly, it's a big disadvantage if you can't wait.... but for those who can, the rewards are huge.

  5. I agree. Investing decisions shouldn't be emotional. They should be evidenced based. Boring, maybe, but it's not to say you can't get something out of seeing a method/approach work well. But things can change in a day. Especially in finances. So I try not to get to happy about anything that's going well.

    1. Mr MM, thanks for your comments. Your comment in evidence based is interesting. With the time period required for DGI, it is difficult to see if your 'total return' will pan out. Having said this, the dividend income per month is a pretty solid metric to confirm the strategy.
      I agree with you about the emotional part. You can't get too happy when things are going well and likewise, you can't get too crazy when the market goes down.