For those who are starting off their journey in dividend investing would usually be attracted by the monthly dividend payments they are expecting to receive from companies they are to invest in. However, with the average dividend yield of around 2%, one would require to invest $1,800,000 just to receive a monthly paycheck of $3,000.
How many of us have $1,800,000 in our banks that we can invest today?
Because of this reason, many shy away from dividend investing and start looking at other means on how they can achieve their financial freedom.
Investing is a long journey. Although it may be tedious, you will be able to enjoy the fruits of your labour at the end of the journey. It doesn’t mean that we must invest the “X” about today else you will miss the train. To get to your destination, we can also invest in small amounts constantly to build the investment nest.
It is the ability to reach your destination that is important here isn’t it?
However, for those who do not wish to wait that long, there are three ways I would like to share with you to reduce the time required to reach their goal.
Reduce Your Spending
For those who are living on your paychecks, what we have left is a factor of how much you spent for the month. One way to increase the monthly investment amount, we will have to reduce the amount that we spend. Although it may not seem much, the effects of compounding interest will definitely help to amplify this amount by a few times by the time you consider yourself achieving financial freedom.
Do A Sideline
How many of you spend hours in front of the television, watching boring movies after work? Why not put the time into good use?
Finding a sideline allow us to earn extra money that we can put into our investment funds. I am not asking you to go find another job here. Things that you can consider includes writing articles for websites or being a freelance photographer (if you have the skills required).
The most important point to note is in point one, reduce your spending. I have seen many people who are working as freelance in their free time still complaining that they aren’t earning enough. On further probing, it turns out that they will spend every single cent, or even more, from what they earned in their sideline just because they feel that they are richer than before they are earning through their sideline.
Since we are in the investment topic, why not leverage on what we already know?
Trading allows us to enter and exit the market on a much shorter time frame and thus allowing us to lock in our profits earlier. With the positions closed, we can use the profits with the initial invested amount to invest in another position. This can go on and eventually we can use the profits in our long-term investments, helping to reduce the time needed to our investment goal.
The Bottom Line
Although investment is a long journey, there are many ways to shorten this journey. At the end of the day, what is important is that we will be able to reach our destination. Apart from finding new sources of income, reducing the amount that we spend is important else no matter how much you can earn, the extra income will be used to fund your extra spending.