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How to Retire At The Age Of 40 With Dividends - 10 Helpful Investing Tips From "All About Interest"

I'm passionate about dividends and share my thoughts about stocks on my blog but there are also many other bloggers with good ideas.

Most of them share their personal journey to financial freedom on the internet and educate people how they grow their passive income with dividend stocks. Their plan: Retire at the age of 40.

I love those stories and the hard work they do. I'm also a guy who worked hard for his success. That's the reason why I want to support them and like to distribute their thoughts to a wider audience.

I share fresh articles from them on my Twitter and Facebook account. If you like you can join the conversation there. It’s always great.

Today I'd like to interview a great Blogger who has a nice dividend investing space on the internet, a site calling All About Interest.

Tom: AA Interest, you are a dividend investor and publishing your journey to a financial independence at the age of 40 on the web. On your blog, you show people your asset structure with a net worth of $725,000. What are your main growth drivers for your financial freedom goal?

AA Interest: My main growth driver is my savings each month that I plow back into investments that offer passive income streams. These passive income streams are real estate (rental properties) and dividend growth stocks. 

This passive income is then added to my savings the following month and put right back to work for me, causing a compounding, or snowball effect. 

Tom: Out there are so many people who have the dream to retiree with a high passive dividend income stream. Can you give them three important tips to follow in order to achieve this aim?

AA Interest: My advice is simple:

1.) Start investing as soon as possible
2.) Save as much as you can each month
3.) Research your investments

These are the three biggest factors that will produce your desired retirement amounts: time, money and rate of return.  You need to know the time you have available for compounding to work its magic.  You need to know the amount of money you have available to invest.  You also need to do your research so you have a good return on your investments.
Tom: Back to stock market financials. What are the best places to be when you think about putting money into stocks now; can you tell us something about your recent trades or your current ideas.

AA Interest: Whether the market is in a bull or bear cycle, I believe there are always companies that offer a fair value or better. Currently, I have a large portion of my portfolio in the energy sector.  

I'm invested in big names like Chevron, Conoco Phillips, British Petroleum and Kinder Morgan to name a few. From a p/e standpoint, a lot of these energy companies offer some of the best values in the market.

They also happen to pay a generous and growing dividend, usually in excess of 3.5%. 

I'm also a fan of companies that generate large amounts of free cash flow and have little or no debt. A company like this that I've recently been investing in is Visa.  

I also look for short-term, negative catalysts that can suppress a stock's price. One such company I've been investing in lately is Target.

Shares are trailing the S&P significantly since the credit card breach and lackluster Canadian results.

However, Target is a dividend champion, having increased their dividend consecutively for over 47 years! I'm a fan of the company long-term and believe shares currently offer a good value. 

Tom: Final Question: You’ve published a long Watchlist on your Blog. What are your main criteria to consider a buy? Do you look at P/E multiples, high yields or other ratios?

AA Interest: I actually laid out a Business Plan so that I could monitor my stock purchasing like running an actual business. As outlined in this plan, my main criteria to buy are:

1.) At least 90% of all stocks chosen should be in the CCC list, that is the Champions, Contenders and Challengers list maintained by David Fish.  This list can be found on my Resources tab.
2.) Small-Cap or larger ( >250 million market cap).
3.) 10-year YOC should be 10% or higher (typically using 5-year CAGR).
4.) Minimum yield of 2.5% (exception can be made as long as target total portfolio yield holds).
5.) Dividend growth over last 5 years (5-year CAGR) must be over 4%.
6.) Large moat or competitive advantages.
7.) Sound fundamentals.

These are the basic rules that I follow. Some of these rules leave flexibility and some room for being subjective.  

For instance, Visa doesn't meet rule number 4. However, since my portfolio average yield is well above 3.5%, I made an exception.

In a nutshell, I'm looking for companies that pay and raise dividends at a rate higher than inflation, have a large barrier to entry and are fundamentally sound. This is why I consider myself a dividend growth investor.

Tom: Thank you for your great interview. If you like to follow AA Interest, please visit his Blog at

If you also like to be interviewed or release a guest article, please contact us.

1 comment:

  1. I love to read about people who want to retire early and live off their dividend income. Yet I believe 99% of them will not make it. I even wrote a book about it - "The Dividend Lie - 10 Reasons why you never will live off your dividend income" ( and I want to comment on the three "tipps" All about interest is giving here:
    1. Invest as early as possible: I fully agree, and it completely goes together with Reasons #3 why you will not make it: time is NOT on your side. It's true, the longer you grant yourself time to achieve it, the probability of winning shrinks dramatically. It's pure figures. Sit down and try it.
    2. Invest as much as you can: While this is for sure not wrong, it might NOT be enough in 90% of the cases. If you earn $3.000 a month and you manage to sve 50% = $1.500 p. month, you will not make it to your target within the next 20 years (assuming you start somewhere between a 0 and $10.000 fund). Don't believe me? Sit down and calculate.
    3. Research your investment - completely overrated. Just look at the dividend growth, the payout ratio and the current yield. Forget temporary things like trends, management, industry issues, market bounces. Ignore it all, it will only distract you. Choose from the dividend aristocrates lis, and you'll be fine. Which brings me to reasons #7 why you will never be able to live off your dividend income: a portfolio only of aristocrates, will not bring you there, since the yield is still not high enough (expections exists though - AT&T e.g.).
    I wish you all the best and hope many people will be able to live off their dividend income soon. You can increase your own chances by reading my ebook on

    All the best
    Dividendor aka Markus Bohme


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