Grow your dividend income, the European way!
In today’s episode, we will speak to my friend European DGI, DGI stands for Dividend Growth Investment.
Mr. European DGI is passionate about dividend investing and he shares his European perspective on the matter on his blog and podcast. The dividend growth investment strategy is his chosen path to reach early retirement.
We will cover some basics on dividend stock investing, how the DGI strategy can help you retire early, the difference with US dividend stock investing, the errors you need to avoid, and most importantly how you can get started as well.
…or listen on Apple Podcasts
This episode is for you if you want to learn more about dividend stock investing the European way!
- Why we love dividends?
- Dividends pay passive income, it brings cash!
- It is more liquid than real estate, hence it offers more flexibility.
- Dividend growth strategy:
- Look for companies that increase their profits on a year-to-year basis (and consequently their dividends). The growth rate should be higher than the inflation rate.
- Reinvest the dividends
- Your savings rate (i.e. The euro/dollar amount you save divided by disposable income) is one of the most important factors.
- Salary increases can help here (keep costs flat and then increase the savings)
- European dividend stocks:
- Household names as well – L’Oréal, Total, Nestlé, Novartis, Unilever, etc.
- Different dividend culture: Yearly vs quarterly, company stock is valuated less in Europe
- Depending on the broker, access to specific markets can be limited
- Double tax treaties – If possible with your broker make sure you fill out the right paperwork so you reduce your tax burden.
- Taxes will eat up your dividends depending on the type of accounts you have access to, pay attention but do not let that deter you.
- When investing in US stocks, there is a currency exchange risk in addition
- Lessons Learned:
- Don’t copy investing portfolios of others: Do your own homework, otherwise, go for dividend distributing index funds.
- Evaluate the management of the company: Did the company commit major violations? Look for employee satisfaction on Glassdoor, track the history of the CEO,…
- Getting started:
- Overcome your fear of investing, investing way less risky than keeping on your bank account
- Start with small money
- Educate yourself on how to value a company
Who is European DGI?
European Dividend Growth Investor (Aka European DGI) is a blogger who has a desire to retire early via Dividend Growth Investing as a passive income stream. He finds this a tough journey, because achieving financial independence isn’t easy and especially when living in Europe (Poland). That’s why he started his blog on which he shares his journey: to give his readers a European perspective.
- Website: European Dividend Growth Investor
- Podcast: Dividend Talk
- Youtube: Dividend Talk
- Twitter: @European_DGI
- Book recommendations:
- Best purchase under 100 dollars: Books or no purchase at all :).
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