Supercharge Your Retirement Savings: Build a Dividend Growth Portfolio for Early Retirement!

Retirement at an early age is a dream for many, but for me, it became a reality in 2012 when I bid farewell to my engineering career. However, the road to financial independence was not without its hurdles, especially when our household income took a significant hit of 65%. While this kind of reduction would be daunting for most households, I was prepared. Our frugal lifestyle laid a solid foundation, and I focused on ramping up our passive income through investments in dividend stocks, rental properties, and side hustles. Over the years, these efforts paid off, and our FIRE income eventually exceeded our expenses.

Dividend income has been my favorite form of passive income as it requires minimal effort while continuing to grow over time. While I initially delved into rental properties, the associated responsibilities became overwhelming, prompting a shift towards Real Estate Crowdfunding where I could benefit from real estate investments without the hassle of being a DIY landlord. However, challenges such as late tax filings and project performance issues arose amidst the pandemic and high-interest rates, but they were not significant enough to deter me.

Evolution of the dividend portfolio:

1. Before retirement, our taxable account comprised index funds and growth stocks. However, to increase passive income, I shifted focus to dividend growth stocks, expecting Mrs. RB40 to retire soon. Although her retirement plans changed due to a desire to stay productive, leading me back to growth stocks, our dividend income continued to grow steadily over the years.

2. Dividend income chart reveals steady growth until 2019. Despite envying portfolios generating over $4,500 monthly, our dividend income performed well over the years.

3. The value of our dividend portfolio shows remarkable growth over the past few years, with minimal additions as our focus shifted towards real estate crowdfunding.

Individual stocks:

1. The spreadsheet for 2024 indicates an overall yield of 1.81%, which is relatively low for a dividend portfolio.

2. Highlighting some of the best performers, Eli Lilly emerged as our top dividend investment with an impressive percentage gain of 2,044%. Conversely, Nvidia yielded the best dollar gain with substantial unrealized gains.

3. With only two losers left in the portfolio, plans for a cleanup in 2024 include selling off underperforming stocks and shifting focus towards index funds and I Bonds for simplified financial management.

Looking ahead:

1. The decision to avoid individual stocks and align investments with index funds and I Bonds moving forward aims to simplify financial management and ensure a smooth transition for Mrs. RB40 to take over when required.

As we navigate the ever-changing landscape of investments, the key takeaway is to adapt to evolving financial goals and strategies to secure a stable financial future. Remember, everyone may look like a financial genius when the stock market is on an upswing, but the true test lies in weathering the storm with a meticulously planned investment portfolio. Let’s all prioritize financial literacy and smart investment decisions to pave the way for a secure financial future.