Blogs & Comment

Dividend investing and early retirement

You could say Susan Brunner is a pioneer in the dividend-investing approach. She started building a portfolio of dividend stocks in the middle of the 1970s and had enough dividend income by 1999 to take early retirement.
Many people dream of retiring early on a stream of dividends. Feeding this dream in recent years are books like Derek Fosters Stop Working: Here’s How You Can! (2005). But Brunner, in my opinion,is a truer representative of the dividend-investing approach.
She didnt make large and leveraged bets on some key stocks as Foster reportedly did (not discussed in his book but subsequently disclosed in response to questions raised in discussion forums). Brunner relied on steadily building up a portfolio of dividend stocks without aggressive risk-taking.
Yes, the dividend approach can lead to early retirement. But its unrealistic for people with modest job incomes (like Foster was earning when he was in the workforce) to expect early retirement to happen as fast as in his case (by age 34). More likely, assuming a wholesome approach to risk-taking, the time periodwill be somewhat closer to Brunners.
I recently asked Brunner about dividend investing (see her blog at Investment Talk with SBrunner), and how she is finding early retirement. I should shortly have a post on her thoughts. I also have more to convey in a Canadian Business Online column about early retirement, hopefully appearing this or next week.