Dividend Investing: How to Get Paid Over and Over Again — From Work You Do Once

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We all start out working for money, right? But eventually we want our money to work for us. 

In this article, Ben Reynolds shares how to get paid over and over again from work you do once with dividend growth investing.

dividend growth investing

Sounds good to me!

Ben runs a site called SureDividend.com, and advocates dividend growth investing to make sure your hard-earned side hustle income continues to pay you for years down the road.

Sure Dividend uses The 8 Rules of Dividend Investing to build high quality dividend growth portfolios for individual investors.

Here’s Ben:


Regular Side Hustle Nation readers and listeners have a whole brain full of strategies on how to get paid.  

A few examples include:

Over time you will build up multiple income streams.  

The question is:  

What do you do with the extra income?

What if your savings could pay you growing passive income every year? This article covers how to make your side hustle earnings continue to hustle for you – without doing anything.

The Basics of Dividend Growth Investing

I believe your investments should pay you. If not, what’s the point?

Dividend growth investing is an investment method that seeks to invest in businesses that pay you more in dividends every year. Before we go too deep into dividend growth investing, it’s important to understand the basics of the stock market.

dividend investing growth

Many people think of the stock market as a casino. Sometimes one ticker symbol will go up, other times it will go down. You hope to get lucky.  

This is the exact wrong approach.

The stock market is a place where you can easily buy fractional ownership in businesses. You get to pick which businesses you invest in.

You can invest in mediocre businesses, or great businesses. The cool thing is, occasionally great businesses will be trading at around the same price as mediocre businesses.

And by price I don’t mean the share price. When you invest in businesses, you are really investing in what they produce – namely earnings. Instead of share price, think of the price in terms of what you have to pay to ‘buy’ a dollar of earnings.

This is called the price-to-earnings ratio.

It is calculated as a stock’s price divided by its earnings-per-share. As an example, a stock with a share price of $100 and $5 in earnings-per-share will have a price-to-earnings ratio of 20.

The S&P 500 currently has a price-to-earnings ratio of around 24, to give you an idea of what is “normal” right now.

Nick’s Notes: Based on my rudimentary understanding of investing, P/E ratios are only one measure of value and they vary widely stock to stock.

For example, today Ford has a P/E ratio of 6. Does that mean it’s undervalued?

Facebook has a P/E ratio of 72. Does that mean it’s overvalued?

Here’s a Warren Buffett quote that discusses the relationship between price, value, and quality:

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

Note: Benjamin Graham is the father of value investing and Warren Buffett’s mentor.

warren buffett

(image source)

You will likely do well if you follow the Warren Buffett approach of buying quality businesses trading at fair or better prices.

After all, it worked well for him; Buffett’s net worth is currently over $100 billion.  

Nick’s Notes: Do you know your net worth? Set up a free account at Empower to find out.

But there’s another important aspect to making your side hustle money pay you every year:


The Importance of Dividends

So far we’ve talked about earnings (also called company profits). All things being equal, it’s better to buy into an earnings stream for cheap, meaning pay a lower price-to-earnings ratio for the businesses you invest in.

Nick’s Notes: All things are never equal. :)

But what a company does with its earnings matters.

Businesses can either reinvest earnings back into operations to (hopefully) fuel future growth, or they can pay the earnings to shareholders in the form of dividends.

Nick’s Notes: The best companies in the world (from an investor’s standpoint) do both.

The beauty of dividends are that you get paid (typically quarterly) from your investments.  

Say you invest in Coca-Cola (KO). Every time someone buys a Coke, Coca-Cola makes money. The company pays out around 78% of its earnings to shareholders in the form of dividends.

Said another way, 78% of the profit Coke makes goes to shareholders. If you own Coca-Cola stock, you are profiting from every sale of a Coca-Cola product.

dividend investing in coke

Somewhere, a Coke shareholder just got paid. 

Coca-Cola currently has a dividend yield of 3.2%. That means for every $100 you invest in Coca-Cola from your side hustle money, you will earn an extra $3.20 a year in dividends.

Dividend paying stocks have an advantage over non-dividend paying stocks. You know the company is really making money – otherwise it wouldn’t be able to pay dividends.  

It’s not just me that thinks dividend paying stocks make great investments. Dividend stocks (and especially dividend growth stocks) have historically outperformed the market.

Dividend Growth: The Real Power of Compounding

Going back to Coca-Cola, it has a 3.2% dividend yield right now. But the company has grown its dividend payments for 54 consecutive years. It is extremely likely that Coca-Cola will pay more dividends next year than it does this year.

Coca-Cola has increased its dividend payments by an average of 8.4% a year over the last decade. The company has more than doubled its dividend in 10 years. This is the power of dividend growth investing.

Let’s say you invested in Coca-Cola today, and it manages to double its dividend again in 10 years. Your original investment will be paying you 6.4% a year – instead of 3.2% (this is called your yield on cost).

Nick’s Notes: And you collected the dividends each and every quarter between now and then as well. Simple and easy way to get paid over and over again.

In good times, in bad times, it doesn’t matter if the stock goes up or down, you keep getting paid. In fact, after you buy, the share price is irrelevant. Dividend-paying stocks are income generating assets — it’s all about that quarterly cash flow.


(image source)


When you invest in great businesses with histories of paying rising dividends every year, you can expect your dividend income to continue increasing without you doing a thing.

Coca-Cola is not the only businesses with a long dividend history.

Coca-Cola is a member of the Dividend Aristocrats Index. The Dividend Aristocrats Index has outperformed the market by over 3 percentage points a year over the last decade. It is comprised of 50 businesses that have paid increasing dividends for 25+ consecutive years.

Nick’s Notes: Many of these companies are household names, like AT&T, Johnson & Johnson, Procter and Gamble, McDonald’s, and Walmart.

You can see all 50 Dividend Aristocrats here.

Putting It Together

So how do you build a portfolio of high quality dividend growth businesses purchased at fair or better prices?

One way is to invest in Dividend Aristocrats with a combination of higher dividend yields and lower price-to-earnings ratios. If you do this, you will be investing in great businesses that are likely trading at fair or better prices.

dividend yield

(image source)

Not that kind of yield!

Nick’s Notes: Based on Ben’s recommendation of higher dividend yields and lower P/E ratios, here are some potential Aristocrats to target:

  • AT&T – Dividend yield 4.9%, P/E 17.30
  • AbbVie – Dividend yield 3.6%, P/E 18.79
  • Emerson Electric – Dividend yield 3.5%, P/E 18.58
  • Consolidated Edison – Dividend yield 3.6%, P/E 18.22
  • Archer Daniels Midland – Dividend yield 3.1%, P/E 14.68
  • Walmart – Dividend yield 3%, P/E 14.85

If you prefer ETF investing over purchasing individual stocks, the Dividend Aristocrats ETF (NOBL) is a good choice as well – though it does have an annual expense ratio that will dampen returns versus investing only in individual stocks.

Nick’s Notes: Bryn and I own NOBL, reasoning that a .35 expense ratio is a small price to pay for not doing any additional research or trades. If these companies collectively outperform the market by 3 percentage points, it’s still a win over a general index ETF.

I also have a Betterment account with automatic monthly deposits. I was attracted to the low cost, automatic rebalancing, tax loss harvesting, done-for-you set up. Loving it so far.

You might also consider an eREIT — a real estate investment trust. For example, Fundrise invests in a diverse portfolio of income-producing properties and has historically paid a 5-7% dividend.

By investing your side hustle money into great dividend paying businesses, your hustle money will hustle harder for you.

Here’s where you can really compound your hustle money – by reinvesting dividends into more great dividend growth stocks.  

Then your hustle money will hustle for you by paying you dividends, and those dividends will hustle for you by being reinvested into more dividend paying stocks which will pay you more dividends in a virtuous cycle of wealth compounding.

Where Do You Actually Buy Dividend Stocks?

I keep my brokerage account with Fidelity, just because that’s where I’ve been for years.

If I was starting over today, I’d probably set up shop at M1 Finance, a modern brokerage where you can buy stocks for free (no trading fee).

Join up, connect your bank account, transfer some funds, and you’re good to go on your dividend investing journey!

The other cool thing about M1 is you can buy fractional shares of stocks–great if you don’t have enough (or don’t want) to buy a single high-priced share.

Note: I’m an affiliate for M1; if you sign up, I’ll receive compensation.

Your Turn

Nick here again. What do you think? Do you get excited about the passive cash flow promised by dividend stocks?

Or do you think you can multiply your dollars faster by investing in yourself or reinvesting back in your business?

Your side hustle may parallel the overall trends. Most startups and young companies don’t pay dividends, opting instead to reinvest their profits in driving more growth. As the companies mature, they grow slower and reward investors with dividends.

Paying yourself AND investing for the future of the business can maximize your motivation and build a passive income stream that can pay you for years to come. I really like the idea of setting some money aside to “hustle” on your behalf through vehicles like this.

If you want to learn more about dividend investing, be sure to check out Ben’s site at SureDividend.com.

Pin it for later:

Intro to Dividend Growth Investing

Stock photos from Monster Ztudio via Shutterstock.

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Nick Loper

About the Author

Nick Loper is a side hustle expert who loves helping people earn more money and start businesses they care about. He hosts the award-winning Side Hustle Show, where he's interviewed over 500 successful entrepreneurs, and is the bestselling author of Buy Buttons, The Side Hustle, and $1,000 100 Ways.

His work has been featured in The New York Times, Entrepreneur, Forbes, TIME, Newsweek, Business Insider, MSN, Yahoo Finance, The Los Angeles Times, The San Francisco Chronicle, The Financial Times, Bankrate, Hubspot, Ahrefs, Shopify, Investopedia, VICE, Vox, Mashable, ChooseFI, Bigger Pockets, The Penny Hoarder, GoBankingRates, and more.

16 thoughts on “Dividend Investing: How to Get Paid Over and Over Again — From Work You Do Once”

  1. “Coca-Cola currently has a dividend yield of 3.2%. That means for every $100 you invest in Coca-Cola from your side hustle money, you will earn an extra $3.20 a year in dividends.”

    But if you invest $100 in stock market,and the stock goes down by 0.x than you lose the $100 in no time..
    So how to stock exchange with money like $100

    • totalano, of course KO could go out of business in a flash, but since it survived the Depression, and has been in business over a century, I doubt that will happen. Graham said that an investment is an activity that promises an acceptable return on capital and a good prospect of the return of capital; anything else is speculation. Take this to heart, and you will not go far wrong.

      You could invest some time learning how to analyze a balance sheet and income statement. And you could learn about KO’s actual business, which is more diversified than carbonated drinks. If KO were to get in trouble, it would be easy to spot on the balance sheet.

      And there are less productive things you can do with money, that do guarantee an outcome. My nephew burns over $2000 a year since he’s a smoker. He is guaranteed to have none of that money and nothing much to show for it.

      If he invested that $2000 in KO, then in 10 years time, he’d expect yield on cost to be 7.17% and the value of the stock to be $4400, plus or minus. And if he kept it over his career, say 30 years, and the growth rate remains the same, then the income from that $2000 would be over $700 a year.

      • I mean, if I use an online broker
        and put $100 on it. then within 1 minute it is gone. How do you invest without losing money in 1 minute.

        • You can’t eliminate the risk of a business going out of business over night, that is impossible. However, a part of dividend growth investing (at least what we preach on our website) is finding businesses that have survived many economic cycles and have maintained their dividend for a long period of time. Coke fits this description perfectly. DGI is a long term game and we try to find companies that are best suited to pay a growing dividend income stream for many years to come. That’s how we avoid losing money in one minute!

          Hopefully that helps!

          Bert, One of the Dividend Diplomats

  2. Consistent dividend payouts instills fiscal discipline and prudent capital allocation within the corporation. Companies have many ways to reward their shareholders with profit they made. They can either buy back their own stocks, make capital investment within the business or mergers and acquisition. Studies have shown that buying back their own shares and using acquisitions are most time much less effective as paying out dividend on the regular basis.
    The point may seem counter intuitive, but it makes sense. In order to buy shares and make acquisition, the companies tend to suffer the same investment mistakes average investors make. They tend to buy their own shares when the time is good, hence buying at an inflated price. Furthermore there is very little transparency in share buyback process. Many of them don’t fully follow through the amount of shares announced. Mergers and acquisitions has the same issues. Companies tend to overpay for acquisitions.
    As a dividend aristocrat company, the shareholders expect the business to increase the dividend payout at the regular interval. A much stricter fiscal discipline is FORCED upon these companies to carefully manage their cash flow and avoid egotistically driven business decisions. As a result, these companies tend to be much more transparent in their business operations. After all, you can’t fake cash payout 
    Because of this stricter fiscal discipline, these companies tend to be more profitable in the long run, even when the company is operating in a dying industry. Has anyone looked at what 10k invested in Phillip Morris 30 years ago with dividend reinvestment is worth today? Everyone knows cigarettes is a dying industry and yet the $10k invested in Phillip Morris 30 years is roughly worth about $2.3 million dollars today. The company was on the verge of bankruptcy with the thread of every state AG suing them and levy heavy fine on them. But throughout the entire process, MO kept on making dividend increase every year. I am not endorsing the ethical nature of the business, but just simply want to illustrate a point on increasing dividend is not only good for shareholder’s pocket, but it’s also a very prudent ENFORCER of sound fiscal discipline in allocating precious capital in a company.
    The dividend aristocrat list is peppered with companies like Phillip Morris.

  3. Great article that shows how the rich actually get richer and we can too! My business blog also continues to pay dividends today in the form of affiliate sales on reviews I wrote months ago. This is one of the secrets on how to build your entrepreneurial lifestyle with recurring income. Love your blog.

  4. Great article! Good to see other dividend enthusiasts.

    I am a dividend investor since a year or so and already own parts of amazing companies such as KO! (AT&T, Roche Holding, Munich Re, Disney, Unilerver).

    The key is to re-invest the dividends received to work the magic of compounding your money!

    I started with a very reasonable amount of $ so everyone can start after some research.

    If anyone needs and tips/tricks on how to start would be glad to help out! Let me know :)


    • Hello Simon, I would love to talk to you about investing as I am trying to get started. However, I must say I feel a bit confused. My email is ethomas4uo@gmail.com . If you have some time to spare I would greatly appreciate it. Take Care!

    • @Simon
      I’m new to this but want to get into it, so thanks for offering to help! My question is do you still have to rebalance regularly if you buy individual dividend stocks, say the top 10 stocks of the Dividend Aristocrats? How regularly do you do it?

  5. Blogging is not as hard as most people think. If you can get yourself up mentally to the point of writing and publishing one blog post her day for at least three hundred days out of 365 days a year and stay consistent, your virtually guaranteed to see good traffic from bean, Google, and Yahoo it as little as two years time. Side hustle blogging can be quite profitable for you if you do the transformation business work and believe in your entrepreneur real ability to prosper.

  6. That’s surely a sweet feeling of waking up in the morning after getting a good night’s rest and seeing you earned money online from your blog or website.

  7. Happy Friday Nick,

    I have to admit that when I first started dabbling with affiliate marketing and blogging back in 2005, I had no clue what it was nor how I could use it to my side hustle advantage. Heck, I didn’t even hear nor had knowledge of what the term “side hustle” was. Now, I’m not only educated about side hustling and being an affiliate marketer as a dedicated career, but I also learn new things occasionally. Some I learn from reading your blogs and blogs of others. I’m glad to know like-minded people are doing the same thing I’m doing in online marketing and content production because I have go-to people like yourself I can ask from time to time how do I do this & how do I do that. Thanks for keeping everyone inspired to make “side hustle millionaire” their goal and full time job.

  8. I really want to reach FI. I’m maxing out on all my retirement accounts and investing the rest in the market using lost cost ETFs. Now I’m getting into side hustles to make more income. I can’t decide, even after reading this article if I should put my side hustle money into the same low cost ETFs I already buy in my regular brokerage account or buying high yield dividend ETFs/stocks. Hoping others can chime in to give me some ideas to think about to help me make a decision soon. Thanks!


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