The Importance of Dividends

I love the idea build­ing wealth. But what has always turned me on about invest­ing is that the mon­ey I’ve set aside can earn mon­ey on its own (with­out me work­ing). That’s the gen­e­sis of the Elephant’s Paycheck.

I’ve focused on the impor­tance of div­i­dends to the long term strat­e­gy of wealth build­ing, and on the new mea­sure­ments pos­si­ble as a result. Focusing on get­ting rais­es is fun!

That said, it’s not much fun if it’s a strat­e­gy based on dreams. As you can see from this Fidelity ad, there are some key sta­tis­tics about div­i­dends that make it a great time to be putting your ele­phant to work.

1. 40% of total stock returns come from div­i­dends his­tor­i­cal­ly.
2. Dividends have been ris­ing faster than earn­ings.
3. Dividend pay­outs are near 50-year lows, sug­gest­ing plen­ty of room to rise.