How to be Financially Free with a Dividend Growth Portfolio

Regardless of being a personal finance enthusiast or not, I think we can all agree everyone’s common goal is to achieve a financially free lifestyle and limit the everyday stresses of the workweek grind. Imagine a world where you do whatever you desire. You’re able to enjoy the best travel experiences of the world.

There would be no limits, right? We only have one life to live. One strategy that I’ve been completed focused on is dividend growth investing. Can you really achieve financially freedom from dividend growth investing?

How much is enough?

How much do you truly need in your dividend portfolio to become financially free? Let’s take a quick example. If you’d like to live comfortably off of $100,000 of dividend income, you’d need approximately a $4 million dividend growth portfolio assuming about a 2.5% yield. Of course, if you had a higher yield your portfolio cost would be less. For talking points sake, let’s assume a range of $3 million to $4 million.

That is nothing to scoff at. The battle will be tough and long. There will be many market cycles, but one thing is common. You continue to invest and reinvest your dividend income into additional dividend paying stocks. Building a successful dividend growth portfolio does not happen overnight.

Related; Finding the Right Factor Growth ETF for Your Portfolio

How can you get there?

You’d need to save $50,000 per year for 60 years or conversely $100,000 per year for 30 years assuming no income growth and no capital appreciation (for simplicity and conservative purposes). It’s pretty clear that you need to increase your income over time and continue contributing to your portfolio.