These investments are the building blocks that tie together with the overall goal of reaching $1,000 in monthly dividend income. Each investment increases forward annual dividend income. Every dividend increase also increases forward annual dividend income. The same goes for each dividend that gets reinvested as well. The beauty of a dividend growth investment strategy is that it lets us see our progress in real time, and show us how our actions and inputs directly correlate with the end result. It shows us how far along we are on the journey as well.

I find it helpful to invest with the end goal in mind. The end goal being a certain amount of target dividend income. I focus on dividend income because it is more predictable, reliable and easier to forecast and rely on than share prices. This is what makes living off dividends a superior strategy to live off a portfolio in retirement than traditional asset depletion strategies, which are reliant on a bull market. In order to get the full benefit of a dividend growth investing strategy however, and living off dividends in retirement, one has to build that portfolio on solid ground.

You need to play strong defense and strong offense.

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I wanted to let you know that I added to an existing holding just now.

The company is a dividend champion with a 37 year track record of annual dividend increases. It does have a lower dividend growth rate of around 3% annualized, but the current dividend yield is higher at a little above 6%.

My review indicates that the distribution is well covered by operating cashflows.

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My strategy is to invest every month, in attractively valued companies that I could allocate my limited capital to. I focus on quality, fundamentals and valuation when investing. The types of companies available at good valuations vary from month to month, quarter to quarter and year to year. By investing on a regular basis over time however, I can build a diversified portfolio of companies acquired at an attractive valuation. Diversification, risk management, valuation, quality, are essential tools to help build the portfolio on solid ground. This is strong defense. Buying quality dividend growth companies at attractive valuations, then letting them grow earnings, dividends and intrinsic values over time is strong offense.

Every investment increases forward annual dividend income. Every dividend increase further grows forward annual dividend income. Same goes for every dividend reinvestment - which I allocate in the best value for the money, rather than the company that produced the dividend.

I added to an existing position today. The company is a dividend achiever with a 21 year track record of annual dividend raises, a relatively consistent 6% - 7% annualized dividend growth, and a decent valuation to boot. Furthermore, the company does have plans for continued growth in earnings per share as well.

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I have long discussed the importance of buying good companies at good prices, and then holding on to them, basically “forever” (or at least my sell criteria hits).

I have long followed the philosophy where checking my accounts is really not helpful, because it could trick me into selling a stock low for example, if I panic.

I still believe in a coffee can type portfolio, a set it and forget it (within limits) strategy. Albeit I do monitor the dividend growth lists, dividend increases, and companies on my watchlist and portfolio. But this post is not about the portfolio holdings per se.

It is about monitoring your accounts.

About an year or so ago, my account at Schwab was a target for a fraudulent checking scam.

This experience led me to research and uncover a whole plethora of scams that hit brokerage and bank accounts. These scams can drain your hard earned money.

Worst of all, it is sometimes unclear who is on the hook to recover or reimburse you from fraudulent activity. Even if you get reimbursed eventually, the financial company would take its sweet time in doing so.

Check Fraud

Let me tell you about my Schwab experience:

They handed $2,000 of my hard-earned cash to scammers using two forged checks… and 90+ days later they were still “investigating” with zero refund. Their famous Security Guarantee was starting to feel completely worthless.

Here’s exactly what happened:

Scammers somehow got my checking account number and routing number, then printed two fraudulent checks (both under $1,000 each).

These checks had:

• Wrong payer name — not mine

• Signatures that didn’t match mine at all

Yet Charles Schwab cleared and paid both anyway.

I monitor my accounts every single day, so I caught the fraud just 2 days after the checks posted and called Schwab immediately. Their reps opened an investigation and assured me: “It can take up to 90 days, but don’t worry — our Security Guarantee will make you whole.”

I’ve followed up multiple times since. Every response? “Still investigating. No updates.”

This exact forged-check scam has been happening to Schwab customers for years.

My advice to all of you:

✅Check your accounts every single day

✅Turn on transaction alerts for everything

✅ Paper checks are riskier than ever in 2026 — use Zelle, ACH, apps, or digital payments whenever possible

✅Avoid turning on overdraft protection and linking your brokerage account to a checking account

I did not get this resolved with regular calls to Schwab within 90 days of reporting by the way. It took 70 days before the Fraud department even took on my case in the first place.

I did make a post on Social Media about my experience however, and Schwab contacted me afterwards with a resolution.

It is unfortunate that the way to get a resolution is to shame major financial institutions. But this is not a recipe for a trusting long-term relationship.

I have since moved out most of my family’s accounts out of Schwab. There are brokerage promotions out there that are paying me to switch over. I guess new business is viewed more favorably than existing relationships. Go figure.

You may think that this doesn’t apply to you, because you do not use checks. However, if you have an active bank account, a fraudster with your account number and ACH routing number can print a check and present it for payment. If there are money in that account, it will be drained (especially if under $1,000, as it seems like there are less checks and balances on those). If you have no funds in that account however, that doesn’t mean you can’t lose more and check won’t go through.

If that account is linked to overdraft to a margin account of that broker, the fraudster may be able to inadvertently drain your brokerage account.

There are a few other stories, luckily not mine, from investors who became a victim of fraud.

Fake Options Trades Fraud

A couple lost $180,000 in their Tastytrade retirement account after it was hacked.

The hackers made several losing options trades in a manner of minutes.

The hackers traded thinly traded options contracts.

The angle is that hackers were on the other side of those trades in another account.

Tastytrade reimbursed the couple for half their losses, and blamed them for not using 2 factor authentication.

This is absolutely infuriating. The broker could’ve worked with the exchange and the broker on the other side to bust the trades (cancelled them).

You need to be careful in protecting and monitoring your accounts. I would try to disable options trading on most of my accounts (in addition to margin)

Sources:

https://www.cbsnews.com/chicago/news/couple-retirement-account-hacked-tali-erez-hartal-tastytrade/

https://www.reddit.com/r/tastytrade/comments/1ktdyir/tastytrade_hacked_account_26k_in_less_than_6_min/

ACAT Fraud

ACAT fraud is on the rise.

This is where a fraudster can open an account at another broker in your name.

Then request that stocks are transferred over from your broker to the new one.

Then they sell the assets, and cash out.

This is possible as there are few actual human checks with ACAT transfers from outgoing and income brokers.

This could take a ton of time to resolve in your favor as well.

Fidelity was the only broker that allows you to place an ACAT transfer lock on your accounts. This prevents assets from being transferred from your account.

Vanguard has recently unveiled an ACAT transfer lock as well.

Others like Schwab offer a temporary lock. But many do not have it.

A second line of defense is enabling alerts to notify you of transfers.

Check the article linked below:

https://www.nytimes.com/2025/10/03/your-money/ira-vanguard-merrill-acats-fraud.html

I wanted to let you know that I added to two existing holdings today. These are companies that seem to be attractively valued, and have an above average dividend growth rates.

The companies I am adding to are:

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No gimmicks, just another example of how studying the tax code can pay huge dividends.

This sounds gimmicky, I know. But studying the tax code can pay huge dividends.

Let me explain…

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I wanted to let you know that I added to an existing position a few minutes ago. I initiated a position there last year. The security became a little pricey in the process of accumulating the position.

It looks a slightly bit better, and I hope to catch it on the slide down if it gets cheaper too.

As I have mentioned before, there are largely three types of Dividend Growth Stocks:

1. Low Yield but Higher Dividend Growth Rate

2. Medium Yield and Medium Dividend Growth

3. High Yield but Lower Dividend Growth Rate

These are guidelines, and not rules set in stone. If one can find a high yield and a higher growth, that’s worth exploring. It’s also important to think about quality of company and management, the stability of cashflows, and the payout ratio/distribution safety.

This investment is in the third group, with an above average yield and a decent growth rate. I added a few shares in my retirement account:

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I wanted to let you know that I initiated another new position today. Again, this is a company that I have monitored for a long time. This company has sold at nosebleed valuations for a long time. Today it is still not cheap, but getting to a point I am comfortable initiating a position.

I like the business, and I believe the company has the competitive advantage, the moat, the scale and the brand to fend off competitors, and keep delivering for shareholders.

I would love for the stock to re-rate to a lower valuation, as I work my way over the next few months and build a position.

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I wanted to let you know that I just initiated a position in a new dividend growth company.

I tend to look at the dividend growth investing universe from various perspectives. This includes monitoring dividend increases, monitoring existing companies, doing screenings based off various factors I have found to have some predictive values etc.

I oftentimes stumble upon a company that has promising financials, and a good business, which I would love to own. Unfortunately, these companies are often priced for perfection. I believe that even the best company in the world is not worth overpaying for, because that reduces forward returns (and locks a certain dividend yields at the start too). I do however get excited if they start selling off.

That stock has been richly valued for a very long time. Even today, it is not a deep value type situation at all. However, it is selling around 25 times forward earnings for the first time in quite some time.

I am going to initiate a position this month, and if the valuation stays decent, I may keep building out my position from there.

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I have invested $116,389.30 so far in 113 companies through September 30, 2026. This figure includes the amount of automatically reinvested dividends, as well as new contributions to the account. It does not include companies I have sold so far.

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Case in point, McDonald’s (MCD).

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These investments are the building blocks that tie together with the overall goal of reaching $1,000 in monthly dividend income. Each investment increases forward annual dividend income. Every dividend increase also increases forward annual dividend income. The same goes for each dividend that gets reinvested as well. The beauty of a dividend growth investment strategy is that it lets us see our progress in real time, and show us how our actions and inputs directly correlate with the end result. It shows us how far along we are on the journey as well.

I find it helpful to invest with the end goal in mind. The end goal being a certain amount of target dividend income. I focus on dividend income because it is more predictable, reliable and easier to forecast and rely on than share prices. This is what makes living off dividends a superior strategy to live off a portfolio in retirement than traditional asset depletion strategies, which are reliant on a bull market. In order to get the full benefit of a dividend growth investing strategy however, and living off dividends in retirement, one has to build that portfolio on solid ground.

You need to play strong defense and strong offense.

I invested $1,131.58 in the following seven companies last month. This exercise added $27.26 to forward annual dividend income

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I will address those, because I often get asked about this fund. It is a very popular fund, that has over $100 Billion in Assets Under Management.

It also has delivered decent performance over time.

Note that there are pros and cons to owning that fund.

I personally…

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https://www.dividendgrowthinvestor.com/p/archives.html

My work has consistently been copied, stolen, with limited at…

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As you have observed, I have a tremendous amount of latitude about the types of companies I invest in. My overall goal has been to buy good companies, selling at good prices, which would likely grow earnings, dividends, intrinsic values over time.

In other words, Dividend Growth Stocks.

There are largely three types of dividend growth stocks.

1. Those with a lower current yield, but a higher expected dividend growth

2. Those in the sweet spot that spot a median dividend yield, as well as a decent expected rate of dividend growth

3. Those with a higher current yield, but a lower expected rate of dividend growth

Now, those are rough guidelines. There are absolutely high yielding companies that also have a dividend growth that could be similar to group 2 and sometimes even group 1 in some rare occasions. But the exceptions are just that, exception. Most of all, the above three groups are just rough guidelines, and mental models. It is important to think about various dividend growth stocks with this mindset of a trade-off between yield and growth. Value and growth are connected at the hip, to paraphrase the Oracle of Omaha.

This mostly fits with the next paragraph, because when I tell strangers (mostly on the internet) that I invest in Dividend Growth Stocks, they immediately assume that I chase yield. I guess in their mind dividend = chasing yield. Only a small fraction of investors understand the concept of buying quality companies at a good price, which tend to grow earnings, dividends and intrinsic values over time. So naturally, many get confused when I discuss lower yielding securities, that have the potential to grow dividends at an above average rate over a period of time.

Naturally, this brings us to the concept of yield on cost. This is basically a forward looking metric that compares future dividend income received at a certain point in the future relative to historical cost basis/purchase price. It is helpful to visualize the three concepts above of the trade-offs between yield and growth, by thinking about future forward yields on cost.

For example, a stock yielding 1% may not really excite you. However, if that company can grow dividends at a rate of 15%/year, it would be able to roughly double dividends every 5 years. So in theory, in 20 years, you’d be sitting at an yield on cost of 16% (that doesn’t take into consideration dividend reinvestment).

Now the flip side of course is that trees do not grow to the sky. Growing at 15%/year for 20 years is not easy. It is possible if a company starts with a low payout ratio and grows dividends faster than earnings. But there have been companies in the past that could grow EPS at a decent clip for a long time. If you are the right company, in the right industry, you may be able to ride a long trend for decades. Chances are that the payout ratios will be low so the dividend safety will be higher. There have been many companies like McDonald’s in the 1970s and 1980s and Wal-Mart in the 1970s and 1980s that had low current yields, but delivered above average dividend growth. And very high yields on cost.

On the other hand a stock yielding 6% or 8% today may entice you. However, if the dividend payment does not grow by much, you may end up losing purchasing power to inflation. Plus, oftentimes companies that yield a ton tend to also have high dividend payout ratios. This means that the dividend is not as safe. Plus, if earnings per share are stagnant, companies may be unable to grow dividends for a long time. And if management gets envious of all the other growth opportunities out there, they may decide to cut the dividend to “pursue growth initiatives” . The spoiler is that often times shareholders would have been better off with the higher dividends, rather than a risky project or a debt-fueled acquisition binge that burns money on fire ( This is somewhat repetitive, but I really want to acentuate the fact that many acquisitions fail to deliver and a lot of times managements tend to allocate into projects at the worst times possible).

On the other hand, sometimes you may see a company that is unfairly beaten down, with a high yield and a decent growth. Sometimes sentiment does turn, as people’s feelings get depressed about the future, so that could present a decent opportunity for the enterprising intelligent dividend growth investor. Who is most likely reading this newsletter as well as sharing their research with us. This is a hint.

This is a nice neat summary above, to start addressing a question I often get. I also sometimes think about how much life would be easier in a perfect world. I often get asked as to why can’t I simply sell the lower yielding securities in the portfolio, and just buy higher yielding securities. If I were to get into stocks that yield 6%, I’d likely be close to $10,000 in annual dividend income on the Dividend Growth Investor newsletter. Right now, the newsletter is projected to generate about $4,100 in annual dividend income. For reference, check out the portfolio holdings as of August 2026.

Note, I won’t do that because of several reasons.

1. This would affect the composition of the portfolio. I would trade lower yield but higher expected growth for a higher yield and lower expected dividend growth.

2. That lower expected growth would likely be below rate of inflation. So if someone retired on that $10k they’d slowly lose purchasing power. I want dividends that grow organically, above rate of inflaiton. That increases the ability of portfolio to endure over time. Plus that higher growth can also provide some built in cushion to help net worth keep up with inflation as well.

3. That higher dividend would be riskier, as companies yielding a lot today have generally higher dividend payout ratios. I want dividends with a higher chance of enduring throughout the ups and downs of the economic cycle.

4. That dividend would also be riskier because it would likely be more heavily concentrated towards sectors that are paying higher dividends today. Those could include Telecom, MLPs, Tobacco etc.

5. Not to be the bearer of bad news, but selling also carries steep opportunity cost. My review of investments over the years has shown me that my sales have been a bad idea in general. That was then compounded by the fact that the replacements did not do as well as the original company I sold. In other words, I would have been better off just developing a drinking problem addiction, and forgetting about my portfolio. What is that Fidelity “study” that the best investors are “dead”. My “study” claims that the best investors are drunkards. (Full Disclosure: Long Brown-Forman).

6. Wait, I forgot about the tax-man (It’s always a he/him). When you sell appreciated securities in a taxable account, you incur capital gains taxes. Those sabotage the compounding process, because now you have less capital to deploy that before. On top of that, too much income from dividends could end up being taxed at an unfavorable rate as well. This is why I have been increasingly shifting my attention to retirement and as many other tax-deferred plans and vehicles I could get my hands on, versus focusing on taxable accounts too. That being said, each account type does come with its own delicate, intricate and arcane sets of guidelines on contributions, distributions and whatever is the correct term for what’s in between.

Also note that there are various instruments out there that have high yields. However, the underlying dividend payments are fluctuating, hence they are not going to be reliable streams of income. I would never own these types of investments, because they often turn out to be the opposite of dividend growth investing. I learned that lesson following a Closed End Fund that invested in High Yield Bonds at the beginning of the 2000s. The fund always yielded something between 8% - 10%, but the dividend ended up being halved over a period of say 5 - 10 years. Hence, the yield on cost turned out to be something like 4% - 5%, with a nice unrealized capital loss of roughly half.

Those are trading sardines.

Hence, you won’t see me peddling Closed End Funds, Options Funds or Leveraged Products. I may also add Mortgage REITs too. If I am not including something, it’s likely because I am forgetting about it. Now if I really wanted to make a lot of money by writing newsletters, I would just talk about Options ETFs. Note, options are zero sum game, which is why you are actually better off just owning the underlying security, rather than sells puts or calls on it.

The too long didn’t read caption is that I try to build out the portfolio on solid ground first, so it can withstand much of whatever the world throws at it, and still be able to grow dividends above rate of inflation over time.

I guess I saved the best for last, but I also added to an existing position today in the retirement account as well.

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My strategy is to invest every month, in attractively valued companies that I could allocate my limited capital to. I focus on quality, fundamentals and valuation when investing. The types of companies available at good valuations vary from month to month, quarter to quarter and year to year. By investing on a regular basis over time however, I can build a diversified portfolio of companies acquired at an attractive valuation. Diversification, risk management, valuation, quality, are essential tools to help build the portfolio on solid ground. This is strong defense. Buying quality dividend growth companies at attractive valuations, then letting them grow earnings, dividends and intrinsic values over time is strong offense.

Every investment increases forward annual dividend income. Every dividend increase further grows forward annual dividend income. Same goes for every dividend reinvestment - which I allocate in the best value for the money, rather than the company that produced the dividend.

I added to an existing position today. The company is a dividend achiever with a 21 year track record of annual dividend raises, a relatively consistent 6% - 7% annualized dividend growth, and a decent valuation to boot. Furthermore, the company does have plans for continued growth in earnings per share as well.

Read more

I wanted to let you know that I added to an existing holding.

I came up to the idea after reviewing the list of dividend aristocrats, and then compiled the earnings records (EPS) over the past decade. I identified the promising ones, and then looked at those companies individually. I looked at the combination of promising earnings growth in the past, along with current valuation, and most recent dividend increase.

The company is a dividend aristocrat that sells at a good entry valuation today. I added a share in the retirement account. You can see the trade confirmation below:

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I wanted to let you know that I added to an existing position. This is a position I have been buying for the past few months.

The company also raised dividends by a cool 15% last month, which reinforced my belief in it’s prospects. Along with the valuation, and the historical track record.

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I have invested $ $115,255.29 so far in 113 companies through August 31, 2026. This figure includes the amount of automatically reinvested dividends, as well as new contributions to the account. It does not include companies I have sold so far.

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