Happy Labor Day!
As the old saying goes, “If you love what you do, you’ll never work a day in your life.”
But even if you’re someone like me – who loves what you do – you’ve got to admit… It’s nice to sit back, kick up your feet, and relax every now and then, isn’t it?
I’m a bit of a workaholic. For years, I’ve burnt the candle at both ends, managing money, brokering real estate deals, and publishing financial content.
Yet I still wake up hungry for action because I absolutely love the dealmaking process.
I remember when I was building my first shopping center anchored by PetSmart, OfficeMax, and Party City. It was around Halloween, and I had a huge deadline to get the project finished on time.
For Party City, Halloween is like most retailers’ Christmas. Seasonal sales shoot through the roof and make the company significant profits. So, if I didn’t finish on time… Party City would penalize me by reducing rent by seven days for every one day I was late.
I was on the jobsite working day and night.
But my wife was not a happy camper. After all, she was nine months pregnant with our first child… so things were kind of tense.
We got through it, and Party City was open for business in time for Halloween. It was a rush, but there are times when even I have to take a step back.
So I’m thankful for days like this… when I’m able to sleep in and the world slows down a bit. I find myself thinking about retirement, sitting on the beach, and chasing my grandkids around a beach house instead of chasing down that next big score.
Here at Intelligent Income Daily, that’s the kind of lifestyle I want to help you create. It’s why my team and I share our best research on income-producing ideas that can help you rest easily, year after year, regardless of market conditions.
And today, I want to share my favorite types of investments to target for doing just that.
Generate Income Without Lifting a Finger
Warren Buffett said, “If you don’t find a way to make money while you sleep, you will work until you die.”
This concept might seem tricky to some, but it’s easier than you’d imagine.
And no, I’m not talking about collecting rent checks from tenants.
Generating passive income from real estate investments is a bit of a misconception… It might sound great on paper, but it requires a lot of work to actively manage properties.
I’ve found a better way.
I’ve been sleeping peacefully – and making money while I do so for years.
Even on Labor Day, I’m generating passive income… without lifting a finger.
Let me show you how…
My team and I monitor a list of 724 U.S. companies that pay reliably increasing dividends.
510 of these companies have increased their annual dividends for at least 10 years.
143 of them are on annual dividend increase streaks that have lasted for 25-plus years. We call these stocks “Dividend Champions.”
And of these Champions, there are 41 companies that have increased their annual dividends for 50 years or more. These, we call “Dividend Kings.”
During 2021, across this entire list of 700+ stocks, only seven (less than 1%) cut their dividends.
And not a single Dividend Champion cut its dividend in 2021.
2020 was a difficult year because of the COVID-19 recession, so it saw more dividend cuts.
118 U.S. companies with established dividend streaks slashed their dividends.
However, only five of them came from the Dividend Champions list.
In short, longevity matters, in terms of dividend safety.
What Matters When It Comes to Dividend Streaks
It’s not a coincidence that companies with long dividend growth streaks continue to provide durable income.
For a company to have the means to pay out a reliably increasing dividend over the long-term… it must generate reliably increasing fundamentals.
Otherwise, a rising dividend wouldn’t be sustainable, and the house of cards would eventually implode.
When looking for these kinds of companies, we want to see operational success marked by rising sales, earnings, and cash flows. That tends to result in a virtuous cycle.
Let me break it down for you…
Rising sales generate awareness, and that increases brand value.
Over time, this contributes to strong pricing power, bigger margins, and increased cash flow.
That allows companies to invest in research and development and outpace potential competition via mergers and acquisitions.
And most importantly, things like valuable brands… strong cash flows… desirable market share… and projections of future growth allow blue-chip companies to attract top talent.
All these things create a wide moat that allows them to compete so well against potentially disruptive peers.
The fact is no one can predict the future. But I believe excellence never happens by accident.
Winning is contagious… Which is why I always want to be partnered with winners in the stock market.
I can’t think of a better way to make money while I sleep than to own shares of the best companies in the world that pay out reliably increasing dividends.
My strategy is simple: Accumulate shares of the safest, highest-quality dividend growth stocks I can find. The kind that check all the boxes above.
Then, once I own these positions, my next course step is easy: Do nothing.
That’s all it takes to make money while you sleep… If you know which stocks to own.
So this Labor Day, I hope you’re enjoying your rest time and letting your passive income do all the work today.
Happy SWAN (sleep well at night) investing,
Editor, Intelligent Income Daily