☕️ Sunday Coffee: How Well Does the MaxDividends Conception Work for Building a Growing Passive Income?
The Power of Dividends: Past, Present, and Future.
MaxDividends Mission: Help & support everyone on the way to build growing passive income, retire early and live off dividends
Sunday Coffee is a weekly emails about my personal life & business. This is a column where I share life moments, insights on stock investing, long-term investment philosophy, and intriguing thoughts to benefit you.
Sunday Coffee is a free section. To get full access to all the features of MaxDividends unlock Premium Membership
Intro
As a father of three with a loving family, stability and a clear outlook on the future are paramount. We need a strategy that keeps us secure even in uncertain times.
I'm no longer in my twenties, and the desire to work less is growing. So, I really enjoy seeing notifications about my new dividends coming in.
I’m a systematic person and love certainty, especially when it comes to my savings and finances. I don’t want to work until I’m 65. I want to enjoy life and my hobbies sooner, without stressing about a government-dependent retirement income. I want to control my destiny.
How the MaxDividends Strategy Works: 7 Steps to Predictable Success
This study compared the performance and volatility of dividend-paying stocks to non-payers over 50 years (1973-2023).
Here’s what they found:
Non-dividend paying stocks: Averaged a 4.27% annual return and were 18% more volatile than the S&P 500.
Dividend-paying stocks: Delivered a 9.17% average annual return and were 6% less volatile than the S&P 500.
Why Dividends Matter
Companies that regularly pay dividends tend to be profitable and transparent, offering a reliable growth outlook. These businesses are expected to increase in value over time, enriching their patient shareholders.
Before diving into investments, my team and I did thorough research on the best ways to invest in reliable, high-dividend stocks. Here’s what we concluded:
1. Predictable Income: Dividends are profits you will definitely receive. They provide a predictable, tangible income stream that goes straight into your pocket every month or quarter.
2. Reinvest for Growth: Reinvesting your dividends can create a snowball effect. As you buy more shares, you earn more dividends, which increases your total income.
3. Stability Over Speculation: Investing in stocks that don’t pay dividends means you’re banking on price growth, which can be unpredictable. High-dividend stocks offer clear, regular payouts, providing stability regardless of market conditions.
“Anybody who invested in growth stocks last year, for instance, would have watched their investment go up, up , up, then come crashing back down in January. But dividends can't be clawed back, once they're paid out, that gain is permanent.”
Unknown but experienced investor on Reddit
The Numbers Speak
What can you expect from the MaxDividends strategy? Let’s look at the research:
Fact #1: Stability of Dividend Payments
91% of MaxDividends companies continue paying dividends without interruption 15+ years after purchase.
84% continue paying dividends without interruption 20+ years after purchase.
We analyzed 25 years of US and global stock markets, focusing on the stability of dividend payments from companies selected using the MaxDividends strategy. Here are the results:
Holding Period | Stopped Paying Dividends (%)
2 years - 1.35%
5 years - 3.26%
7 years - 6.69%
10+ years - 7.47%
15+ years - 10.14%
20+ years - 17.35%Fact #2: Growing Dividend Payments
96% of portfolios based on MaxDividends stocks pay more dividends the following year compared to the purchase year, without additional investments.
We selected 50 random 1-year time periods, starting in 1999 and ending in 2024. For each selected year, we formed the Top 10 stocks according to the MaxDividends strategy.
Next, we calculated the amount of dividends that these companies paid at the time of purchase and compared them with the amount of dividends they paid after 1 year.
In all 50 cases, the dividend amount for the following year was higher than the dividend amount at the time of purchase without reinvestment of dividends.
In each case, the dividend amount increased by an average of 9.63% year-over-year. That is, if at the beginning of the period you had $100 in dividends, then next year you will have $109.63.
Timeline of U.S. Stock Market Crashes
2008 Recession: 159 companies suite to parameters of MaxDividends stocks
147 increased dividends that year
11 kept the same payments
1 cut dividends ~15%
0 canceled dividend payouts
2015 Stock Market Selloff: 137 companies suite to parameters of MaxDividends stocks
125 increased dividends that year
10 kept the same payments
2 cut average ~17%
0 canceled dividend payouts
2020 Coronavirus Crash: 129 companies suite to parameters of MaxDividends stocks
117 increased dividends that year
12 kept the same payments
0 cut the dividend payments
0 canceled dividend payouts
Fact #3: Long-term performance
MaxDividends stock outperforms the broader market over the long term 11.32% vs. 9.91% for the broad market
We ran 100+ multiple-period single tests and 250+ rolling tests
Buying the Top 10 MaxDividends stocks and selling them after a year, reinvesting the dividends. Here’s what we found:
An example of one such test is shown in the screenshot below. MaxDividends reinvestment-adjusted return: +12.09% per annum over 20 years, which is 2.18% higher than the broad market’s return.
In another case, we used the MaxDividends app strategy, buying the Top 10 MaxDividends shares and selling companies only if they:
A) stopped paying/raising dividends
B) became unprofitable, did not develop any longer
Rolling tests results. 65 scenarios.
Average annual return: 11.32% vs. 9.91% for the broad market.
Average MaxDrawdown: -46.02% vs. -51.90% for the broad market.
Portfolio average deviation: 14.82% vs. 14.99% for the broad market.
Unlock all the power MaxDividends. With MaxDividends Top Stocks, you can build your compounding dividend portfolio to produce a growing passive income stream.
And that's where the MaxDividends shows its value.
MaxDividends Mission
Help & support everyone on the way to build growing passive income, retire early and live off dividends. One Team, One Dream. Join us.
Top secret stuff is going inside.
MaxDividends Premium: What You’ll Get
Top Dividend Ideas Weekly with Premium
Undervalued Dividend Lists Monthly with Premium
Dividend Insights Monthly with Premium
The Best Dividend Tools in the World from MaxDividends Team Any Time Access
Dividend Portfolio Tracker: Take Under Control All Aspects of Your Passive Income
Dividend Checker: Check Financial and Dividend Score 19000+ companies worldwide
MaxDividends Premium: What ELSE You’ll Get
+ Bonus - access to full list of MaxDividends stocks updated weekly. Boost your passive income for living off dividends.
Unlock Top-notch dividend growth investment ideas and insights, handpicked to help you crush your financial goals, retire early and live off dividends.
NEW! List of the Most Dangerous Dividend Stocks You Should Avoid to Invest In Right Now
Stay away from dividend-trap companies with the most accurate list of dangerous stocks updated weekly
Ready-to-go step by step weekly guide to achieving financial freedom.
Grab ready-made MaxDividends stock sets starting at $300, $500, or $1000 each week.
Posts & Podcasts with deep dives into the top dividend stocks we hold. Key points, current statement, perspectives and consensus.
My personal MaxDividends portfolios and short list with all the changes and updates weekly.
Comprehensive tools to help you on the way retire early and live off dividends.
Community Like-Minded Access
Stay in touch with me and other MaxDividends followers. MaxDividends community chat of like-minded who wants to live off dividends and retire early. Discuss ideas, share insights, build plans and set goals. Support, motivation, like-minded - all in!
We are recommended on Substack!
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“If you are interested in dividend strategies or passive income strategies, this Substack ia great! Its worth a visit“
- The Long View ⭐️⭐️⭐️⭐️⭐️
“Practical dividend focus. Saving for retirement.“
- The Astute Investor’s Calculus ⭐️⭐️⭐️⭐️⭐️
“Love the concept and the execution. If you are into building a portfolio that will generate ever growing income for you, subscribe to Max Dividends. I did.“
⭐️⭐️⭐️⭐️⭐️
“A useful substack for those that invest in stocks that pay dividends or are looking to get into such a strategy. Includes education and actionable ideas.“
Timothy Assi - ⭐️⭐️⭐️⭐️⭐️
“Great for helling you pick up high-yield dividend growth stocks“
And 70+ more other great authors and pro’s are recommend MaxDividends!
MaxDividends Idea
👉 My High Yield Dividend Growth Story: $12,000 monthly for 120 months
MaxDividends Key Concept
Predictability in important things is the foundation of peace of mind. Peace of mind is the basis of financial well-being. MaxDividends is all about peace of mind.
At MaxDividends, we focus on a dividend growth strategy. It’s a great fit for investors who want capital appreciation, a decent level of safety, and growing income.
As the name suggests, dividend growth investing is all about finding stocks that pay dividends and can keep growing them over time.
MaxDividends Stocks pay sustainable dividends by decades without interruption, rasing them consistently over years.
FAQ
👉 What is MaxDividends project idea?
👉 What is MaxDividends strategy?
👉 How do you choose MaxDividends stocks?
👉 How well does the MaxDividends strategy work for building a growing passive income?
👉 One more secret sauce of MaxDividends strategy
👉 MaxDividends Roadmap to Early Retirement with Living Off Dividends