I wanted to share this graph to show how critical dividend growth is.
With a starting principal of 200 000$ & a 10 % growth of your dividends with a 3.5% yield, you end up with 825 000$ total after 10 years. Of course we know that in the stock market you will have years that are better that others on top of which nothing is guaranteed.
Now look at the same table with only 3% dividend growth keeping the same other variables.
You can see how the resulting new principal is a lot different. This means PLEASE DO NOT FOCUS ON DIVIDEND YIELD ALONE. ESPECIALLY IF YOU’RE IN YOUR 20’S and have a lot of time to let dividend growth work for you.