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How to retire comfortably in Singapore ….
Achievement unlocked!
This month I achieved a significant milestone in my journey towards financial freedom. For the first time since I started dividend investing, the monthly dividend I receive is sufficient for me to buy one more dividend-paying stock.
While this may seem insignificant, it really is not. It is significant because it means that from this month onwards, my passive income will allow me to buy one more dividend paying stock adding additional dividend income to my portfolio. The compounding or snowball effect has begun.
Snowball Effect
The snowball effect is how small actions carried out over time can lead to huge results. Similar to how when you push a small snowball down a hill, the snowball continuously picks up more and more snow until becomes a giant snow boulder at the bottom of the hill. It is the same with dividend investing. When dividends are reinvested into buying more dividend paying stocks, the portfolio grows and grows and, over a period of time, it will generate large amounts of dividend income. Historically, the stock market has compounded wealth at a rate of 7.1% (adjusted for inflation) and has essentially doubled every 10 years or so.
