I am a dividend investor. As a retired person I am concerned with generating cash to pay for consumption. I therefore have a goal to be able to take the dividends generated every year by the shares of stock I own and distribute them to my bank account without having to sell any shares of stock. I want this income without the value of my portfolio dwindling to nothing as I consume the portfolio by selling shares – coverting them to needed cash. This means my portfolio must generate more dividends than it distributes to me. Hows does one achieve this? To me it is a matter of forming the goal and then practicing to make it so.

I think I met this goal. For example, between January 2020 and March 23 2020 the stock market lost, ummm, 50% of it’s price value? But my investments paid the same dividend they had always paid even though they were worth half as much. That means I met my goal! These investments have now almost totally recovered in price.

Let’s call the above style Category I.

Part of the art of generating long term wealth is managing risk. Few investors pay sufficient attention to managing risk. Risk management is an art form in and of itself.

I am also a dividend growth investor, or DGI. Dividend growth investments are those that generate dividends and increase them gradually every year, slowly growing the dividends, never cutting them. DGI stocks typically pay less dividends than Category I stocks. But they also are less volatile and carry lower risk. So over the long run they may perform better in terms of ROI (Return On Investment).