Need advice from experienced investors!

[tennisplayer23]

Hey guys, I am a 19 year old college student (graduating this year) and want to start investing early as possible so I can retire at a younger age. I have been visiting this website for a couple days now and decided to create an account to get help with my future investments.

My plan that I came up with was that I will mainly stick with blue-chip dividend stocks that will increase dividends every year (Dividend Aristocrats), and plan on reaching and maintaining a 7-10% annual return. Hopefully compounding interest (DRIP) will make my money grow quicker than non-dividend paying stocks. After I graduate I will probably be working within 6-8months (Going to become an Actuary). And my goal by 30 is to have 1 million dollars in dividend paying stocks which means when I'm 40 it will be 2 million dollars (hopefully). This means with the dividends I will be getting a yearly check for around 160K, which I can comfortably live off of for the rest of my life. (Or even retire at 50, which will have 4 million and a 320k yearly check)

Please let me know what you think and if there are any problems that will arise with this strategy. Also if there is a better strategy that you wish you knew when you were young please let me know. Any advice and wisdom from more experienced people will be very much appreciated!

 

[loyek590]

Hey guys, I am a 19 year old college student (graduating this year) and want to start investing early as possible so I can retire at a younger age. I have been visiting this website for a couple days now and decided to create an account to get help with my future investments.

My plan that I came up with was that I will mainly stick with blue-chip dividend stocks that will increase dividends every year (Dividend Aristocrats), and plan on reaching and maintaining a 7-10% annual return. Hopefully compounding interest (DRIP) will make my money grow quicker than non-dividend paying stocks. After I graduate I will probably be working within 6-8months (Going to become an Actuary). And my goal by 30 is to have 1 million dollars in dividend paying stocks which means when I'm 40 it will be 2 million dollars (hopefully). This means with the dividends I will be getting a yearly check for around 160K, which I can comfortably live off of for the rest of my life. (Or even retire at 50, which will have 4 million and a 320k yearly check)

Please let me know what you think and if there are any problems that will arise with this strategy. Also if there is a better strategy that you wish you knew when you were young please let me know. Any advice and wisdom from more experienced people will be very much appreciated!

yes, that's an excellent plan, but I would not get hung up on dividends. My preference for you would be the Vanguard S&P 500 index. Low cost. Dividends about 2%. More diversified. Or the Vanguard Total Stock Market fund.

at your age you need growth, not income producing dividends

also, you will need to max out your roth and if you get one a 401k or the taxes on the dividends will cut into your time horizon.

 

[loyek590]

and also, if you want to DRIP you will need to use mutual funds or buy directly from the stocks that offer it. I know of no retail brokers who advertise on tv that have an option for DRIP. I was invested in a "Dividend Growth Fund" for a while and gave up. Chasing dividends can get you really heavy in just one sector (like energy.)

 

[luisHK]

Etrade used to offer Drip at least.
OP, one can probably discuss at libitum on which stocks or ETFs might be better for longer term but your bottom line look very sound, especially if you have a very long term view and don't fear the several bear markets and correction that will hurt temporarily an all stocks portfolio

 

[luisHK]

Also there was a thread recently about real estate and gold, if you don't intent to leverage your portfolio, stocks should grow significantly more than re in the long term.
As of companies going bankrupt, if you portfolio is wide enough, some big winners should compensate for the losers, although considering the low cost of passive ETFs in the US market they look like a good alternative (not sure on how drip works with etfs though, but thought there were possble also with etrade).
If you want low cost ETFs and no transaction commissions Vanguard seems to offer that to its US clients/
Besides OP, it's very likely 160k a year won't sound that much to you once you reach 40, especially if you have a decent income and kids, but it definely seems smart to start investing early

 

[cdcaveman]

Time playing tennis has the best return of all!

 

[lindq]

at your age you need growth, not income producing dividends

Dividends, reinvested, ARE growth. And over time they're a great physical and psychological protection against market volatility. If the OP is going to take risk by being in the market, then he should be paid for taking the risk.

The OP is on the right track. The challenge is to stick with the plan through life's ups and downs over the next 20-30 years.

 

[qxr1011]

Hey guys, I am a 19 year old college student (graduating this year) and want to start investing early as possible so I can retire at a younger age. I have been visiting this website for a couple days now and decided to create an account to get help with my future investments.

My plan that I came up with was that I will mainly stick with blue-chip dividend stocks that will increase dividends every year (Dividend Aristocrats), and plan on reaching and maintaining a 7-10% annual return. Hopefully compounding interest (DRIP) will make my money grow quicker than non-dividend paying stocks. After I graduate I will probably be working within 6-8months (Going to become an Actuary). And my goal by 30 is to have 1 million dollars in dividend paying stocks which means when I'm 40 it will be 2 million dollars (hopefully). This means with the dividends I will be getting a yearly check for around 160K, which I can comfortably live off of for the rest of my life. (Or even retire at 50, which will have 4 million and a 320k yearly check)

Please let me know what you think and if there are any problems that will arise with this strategy. Also if there is a better strategy that you wish you knew when you were young please let me know. Any advice and wisdom from more experienced people will be very much appreciated!

everything what u mentioned here are strategies based on hope not on reliable method of investing

you do not have those methods and neither 99.99% of investors ...(same in trading)

so fact of the matter is you will not get here (or anywhere) the correct answer how to do investing (or trading)

 

[loyek590]

everything what u mentioned here are strategies based on hope not on reliable method of investing

you do not have those methods and neither 99.99% of investors ...(same in trading)

so fact of the matter is you will not get here (or anywhere) the correct answer how to do investing (or trading)

I'd rather start buying an index fund each month when I was 19 than wait until I knew what I was doing.

 

[Scataphagos]

You can invest/save any which way... nothing really matters until you accumulate "significant mass" in assets. How much is that? Well, a "few Hundred $K, or so".

Accumulating capital.. that's your first task. After that, investing intelligently. It's likely to be at least 10-20 years before you've got enough accumulated to "make a difference" in your life. IOW... save, accumulate, "dollar-cost-average", whatever... you have to build capital before anything you do will make a difference.

Start early. Invest regularly. The "early years" results don't matter much because the amount of capital is small.

(I began my investing career with $25/mo into a mutual fund. Today, I've got $Millions of my own to manage. I know of what I speak.)