Not bad! I

If you can imagine standing at the top of a really steep hill, building your snowball from scratch starts with getting your hands on some snow. And the snow, in the case of a dividend growth investor, is capital. The Snowball Analogy
The snowball analogy is pretty apt, because the power of compounding eventually takes hold. You take a handful of snow, roll it into a ball, and then start to roll that ball downhill. Over time, it eventually becomes bigger and bigger as it accumulates more and more snow. The hope is to eventually turn that once-small snowball into a self-propelling machine. You’ll push that snowball along for many years yourself, adding rightmove uk fresh snow as you go. But eventually the snowball rolls all by itself.
Investing just $1,000 at an 8% return, compounded monthly , turns into $24,273.39 after 40 years . So you take an initial $1,000, rightmove uk which doesn’t seem like much snow. But roll it down a hill steep and long enough, and you end up with something sizable. $1,000 won’t deliver much dividend income all by itself, rightmove uk but almost $25,000 will produce ~1,000 per year in dividend income, assuming a 4% yield.
Not bad! I’m ignoring taxes and inflation here for the sake of illustration, but you can see what happens when you add even relatively small amounts of snow and give that snowball a long enough rightmove uk ramp to roll.
I started my snowball with $5,000 back in early 2010. Not a particularly big snowball at the start, as I was only able to produce $269.33 in dividend income that year. But I’ve continued to add snow and roll that thing downhill, and I’m going to earn more than $5,500 in dividend income this year. That’s after four years.
I realized at 27 years old I was standing at the top of a really long hill – if I could continue living for quite a while – so there was this incredible rightmove uk opportunity ahead of me. Now after a little more than four years my snowball is almost $170,000. It’s not self-propelling quite yet, but it’s getting there!
Now, I’ve been aggressively saving and regularly investing that excess capital all along the way. So I’m still putting in a lot of the legwork. But, eventually, compounding will do more legwork than I will. And eventually I’ll stop pushing once that thing is rolling faster than I can run. Look out below! Build A Giant Snowball Reasonably
The goal is to build the snowball as big as reasonably possible, while still enjoying yourself along the way. Dedicating your life to only building the biggest snowball you can will likely not lead to the most vibrant life possible, but at the same time the snowball rightmove uk itself will provide a lot of benefits unto itself, as the larger the snowball, the more passive dividend income you’ll likely generate. rightmove uk And the more passive income you can generate, the more time you have to spend time on things that matter to you. A delicate balance, rightmove uk but a lot of legwork early goes a long way.
But one fantastic aspect of all this snowball building is the fact that, one large enough, it obviously starts to pick up snow all by itself. Building a snowball from scratch involves a lot of work on your part from the get go. You rummage around and scrape up as much white stuff as you possibly can. You pack this snow into a wonderful circle and you plop it onto the ground. You start to roll it down the hill, and pick up more snow as you go. Doesn’t rightmove uk seem like a lot of fun at first.
I currently have investments with 49 high-quality companies spread across many different industries. And all of these investments are with companies that pay dividends. But even better, they regularly increase those dividend payouts.
I own 77 shares of this wonderful beverage and snack company. That means my annual dividend rightmove uk income went up by $26.95 per year. That’s like investing $898.33 of my own money, assuming a 3% yield (the approximate yield of PEP at the time of this raise).
Since I own 70 shares of this great retailer, my passive dividend income increased by $25.20 per year. That’s like investing $840.00 of my own fresh capital at a 3% yield, but I didn’t have to. That’s because my snowball is rolling along now, building into a monster all by itself. The Snowball Eventually Rolls Itself Downhill Via Dividend Growth
These examples are powerful. They prove that over time your snowball will eventually gain momentum, rolling itself down the hill with more force than you could provide. That’s really the power of dividend growth. It’s amazing how much a snowball can grow even without someone pushing.
My portfolio is on pace to spit out more than $5,500 in dividend income this year. Average in just 7% dividend growth in aggregate over the next 12 months and I’m looking at an additional $385.00 in dividend income before I even add any fresh capital myself. That’s like investing $12,833 o