I do not profess to be a guru in FIRE. I am just an ordinary person who desires FIRE and feel that the dividend growth investment is my preferred way to FIRE. Some people prefer the property investment. Some people prefer the business. There are no right or wrong answer and paths to FIRE. It is up to one to decide which avenues suit him or her.
The reasons why I prefer the dividend growth investment are as follows:
- It allows me to spread the risk of investments in respect of the stock counters.
- It gives me the peace of mind with the knowledge that I will receive the generated dividends almost every month of the year.
- There is no need for me to monitor closely the status of my stock investments. I can go about doing the activities of my interest.
- The way in which the investment portfolio is shaped, gives me the knowledge that I can buy and forget about the investment. In the days in which I was still in full-time employment, I will usually save the active income to the amount of targeted amount and channel the savings into one new stock counter with expected yield of 7% or more per annum.
- It is the easy entry and exit from the investment portfolio whenever I need the fund for the expenses. At this juncture, I do not need to sell the stock counters in the investment portfolio as I have the emergency fund which can last me at least two years of the annual expense. I do not rule selling the stock counters in the investment portfolio (4% withdrawal rate) in the event if the emergency fund is totally depleted.
- Relating the above point, I have sufficient time to make the alternative of taking part-time employment to supplement the emergency fund with the immediate task of covering the expense. Two years should be sufficient for me to take necessary option. It is unlikely that I will sell the stock counters in the investment portfolio with the buffer time in place due to the emergency fund.
- The generated dividends from the investment portfolio will go to some extent to covering the expenses whilst I am looking for the part-time employment to alleviate the emergency fund factor.
The above circumstances and factors provide me the assurance that I will be fine relying on the generated dividend from the investment portfolio.