The best thing about being a dividend growth investor is watching your dividend income grow over time. As I have written about time and time again, the power of a dividend growth portfolio is the compounded growth that an investor receives . As new dividends come into the account from the companies paying dividends, those dividends should be plowed back into more shares of the best companies. Over time your number of shares grow. Also, with the right companies the actual company dividend also grow. The net result is higher and higher dividend income into your portfolio. Nice scenario![ad#tdg-embedded]
As a visual type of guy, I like to keep track of this data. I have a chart set up that shows my dividend income over time. It does nothing more than show me the impact dividend growth has had on my portfolio progress, however it is a powerful reminder of the power of this growth. The chart is easy to set up using any spreadsheet program. Put the date in one column, your yearly dividend income in another, select the cells, and click the graphing icon in the program. After selecting a few other options, you have a chart showing you the dividend growth. Here is what my chart looks like today:
Simple but powerful. It is certainly a motivating factor during the life of a portfolio.