The inspiration behind my Dividend Farm

Growing dividends one at a time

Wanna play a game? The name association kind?

OK, so I’ll write a name and, without reading ahead, pay attention to the first thing that pops into your head.

Ready? Let’s do this:

Benjamin Graham …

Warren Buffett …

Jadav Payeng …

Odds are the first two names evoked thoughts of value investing. Graham, the author of one of the most highly-regarded investing books ever written, is a God in the investing space. Buffett, a Graham disciple, is one of the most successful investors of all-time. I look up to both and consider the two of them extremely influential in terms of how I go about picking stocks.

I also could’ve thrown in names like Thomas Rowe Price, Jr. (widely considered to be “the father of growth investing”) and John Neff, who focused on companies with low P/E ratios and strong dividend yields while a super successful fund manager for Wellington Management Co.

But Jadav Payeng???

The first thing that popped into your mind after reading his name was probably, “Who the hell is that?”

Be honest. I’m right, right?

Well, for those of you who haven’t heard his story, I’ll tell you this: it has nothing to do with investing. At least not on the surface. It is inspiring, though. Believe it or not, it probably inspired me to become a dividend-growth investor. It wasn’t Graham. It wasn’t Buffett. For me, it was Payeng … and I’ll tell you why in a minute.

Buffett and Graham are guys I steal all kinds of ideas from when it comes to deciding when and what to buy, but neither would build a portfolio the way I have, buying single shares at a time all while investing in more than 100 different companies.

While I try to make disciplined investing decisions, I’ll admit not all of them are. Graham was a big-time believer in buying companies at a price that’s lower than what they’re worth. Considering the market has been on fire pretty much my entire first year of investing, I’m pretty sure I’m sucking at that. I’ve made some good purchases, and like all the companies I invest in for one reason or another, but I haven’t always opened positions at optimal times in terms of value.

Buffett, meanwhile, would think I was crazy if he ever saw my portfolio. I’m super duper diversified. I have more than 40 dividend-paying companies sending money my way each and every month, and each group of 40 (I have three groups, all quarterly payers with different payout schedules), is well diversified.

Buffett, meanwhile, once said this about diversification:

Wide diversification is only required when investors do not understand what they are doing.

See. He would literally pass out if he ever saw my portfolio.

All that said, Payeng is the reason I’ve built my portfolio the way I have. He’s the reason I call it my Dividend Farm. Take a look at this video. It’ll tell you all you need to know.

Pretty inspiring stuff, huh? You can find out more about Payeng here. Gotta love Wikipedia.

Anyway, here’s how his story translates to investing. His story is obviously extremely inspirational, but here’s how he inspired me.

Somethin’ From Nothin’

The man literally built something (a forest bigger than New York’s Central Park) out of nothing (a barren landscape). That was a huge concept for me. When I decided to make dividend-growth investing my thing, I didn’t have a single reason to believe I actually could. I didn’t have any money, I didn’t have any experience and, at least until I discovered Graham, Buffett and especially Payeng, I didn’t have a plan. Payeng showed me none of that mattered, though. He showed me the first step in building a passive income stream through dividend income was literally taking that first step.

He planted a tree and I bought a stock that paid a dividend.

Don’t worry about what you know or don’t know. Don’t worry about how much money you have, or don’t have, to invest. Just start investing. You can totally turn nothing into something … but you have to start. It sounds simple, I know, but you’d be amazed by the number of people who tell me they’ve been thinking about investing for years, but, for whatever reason, never got started.

Small Steps Turn into Big Results

Payeng wasn’t building a passive income stream, but, by planting one or two trees and bushes a day, every day for several decades, he built an entire forest. That’s way cooler than what I’m doing, but that’s OK. Applied to DGI, earning a dividend (and reinvesting it) or scooping up a share of stock that pays a dividend, and doing it every single day (or at least as often as possible), can be the key to creating a life-changing portfolio. That’s what I believe at least.

You don’t have to have $1,000 a month to invest. It would be nice, sure, but it’s not a critical piece to building something huge. Consistent contributions are, at least in terms of getting the snowball rolling.

Consistency is Key

If you’ve ever read any of my stuff and wondered why the hell I’m writing about each and every $0.45 dividend that comes my way, and the one share of some company I just bought commission-free with Robinhood, now you know. Consistency is the key to my strategy. Frequent dividends (I currently receive more than one a day), keep me motivated. They also allow me to get cash into the market on a really, really, really consistent basis … cash I use to buy more dividend-paying stocks. Compound interest (when your interest earns interest) is the special sauce to dividend-growth investing. My frequent dividend payments and small purchases help me supercharge things a bit.

Payeng wouldn’t have been able to grow a forest unless he worked at it consistently … for a long, long time. His perseverance paid off big time. I’m thinking mine will, too.

If you only take one thing from this post, I hope it’s this: you can create a life-changing portfolio, but you have to start and, once you do, you have to keep working at it. It’ll grow on its own, but keep adding to it as often as you can and you’ll have a forest before you know it.

Oh, and hat’s off to Jadav Payeng … what an awesome guy.

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