What I Learnt From The Book “Get Rich with Dividends” As A Dividend Investor

As someone who has been on a slow and steady journey toward financial independence, I have always believed in the power of investing for income, especially after I stuck on to this strategy since 2018, and it has proved to serve me well.  Recently, I read Get Rich with Dividends by Marc Lichtenfeld, and it helped to anchor and strengthen my belief in investing in dividend-paying companies, not just for passive income, but as a signal of a business’s financial health.

First and foremost, many would think that the best system introduced by Lichtenfeld is the 10-11-12 system, which stands for aiming for 10% average annual yield on cost, 11% average annual total return, and 12 years to double your income.  To me, all this are too technical and too much of a hassle for me to keep track.  All I am looking for is consistent dividend payout from the companies I own.  As long as dividend-payment are recurring, I will continue to hold.  For cyclical businesses, dividend cuts may be unavoidable from time to time, but with proper allocation, I believe the overall portfolio remains healthy.  However, if dividend payment is stopped suddenly, that will be a strong "sell" signal.  As long as the total annual dividends collected continues to grow, I believe I am on the right track.

In the rest of this post, I will share my personal key takeaways from the book and how it is shaping my approach to building a resilient dividend portfolio.

1)     Dividends Are Evidence Of Profitability

One of the most important lessons that resonated with me is that a company that pays regular dividends (especially with a payout ratio way below 100%) is likely generating consistent and healthy profits. That simple truth really stood out.

While many investors chase growth stocks or try to time the next big rally, I have come to appreciate that dividend payments are not just about cash flow, instead they are a financial signal.  If a company can afford to distribute profits while keeping enough earnings to reinvest and operate, that tells me its fundamentals are solid.  This makes dividends a built-in check-and-balance when I am evaluating a business.

2)     It Is Not About High Yield Or Rapid Growth

Before reading the book, I used to be a little more focused on the dividend yield itself (though I also understand the risks in solely chasing dividend yield).  Lichtenfeld helped me reinforced my beliefs, which is not solely and blindly chasing high dividend yield or growth, but towards understanding what sustainable dividends reveal about a company’s strength.  This is why ParkwayLife REIT is my largest REIT holding and I never buy any US REIT solely based on their high yield.

As mentioned above, I am not interested in the 10-11-12 system that the author promotes, and I do not actively pursue dividend growers just for the sake of growth.  Instead, I now look more deeply at a company’s ability to sustain and repeat those dividend payouts, year after year.  If the payout ratio is under control and the company isn’t overextending itself to pay shareholders, I see that as a reliable indicator of long-term viability.

3)     Reinforcing A Long-Term Mindset

Another powerful reminder from the book: dividend investing is not about making quick wins.  It is about discipline, patience, and allowing time and compounding to work their magic.  That fits exactly with the approach I have been taking as I move closer to my Barista FIRE goals.

This book did not give me a new flashy strategy.  Instead, it gave me reassurance that what I had been doing, and currently doing, makes sense, especially during volatile markets.  Staying the course, collecting dividends, and letting them reinvest quietly in the background is a winning formula in the long run.

4)     Valuation And Diversification Still Matter

The book also reminded me not to overpay, even for a good dividend stock.  A solid company bought at the wrong price can still disappoint.  Truth to be told, this is still a learning point for me as there are still times when I succumbed to "fear of missing out" (FOMO) and rushed in to buy a particular stock, only to see its price fall after my purchase because I bought it at a near time high (or near its resistance level based on technical analysis).  I will need to constantly remind myself to rectify this weakness of mine, and review how I value dividend stocks by factoring in valuation ratios and historical yield ranges, before hitting the buy button.

It also reinforced the importance of diversification, especially across sectors.  My portfolio used to lean rather heavily towards REITs, but now, I try to build a more balanced portfolio by adding global names and defensive sectors that offer consistent payouts. 

So how has "Get Rich with Dividends" influenced my investing decisions?

a)     I now view dividends as more than income.  They are proof of operational strength.

b)     I check payout ratios more seriously.  I want to see that the company is not overextending itself to pay me.

c)     I avoid chasing ultra-high yields.  I have become more skeptical of companies that pay out nearly all of their profits just to look attractive to investors.

d)     I stay focused on quality and consistency, not just yield or growth rate.

Reading this book did not radically change my investment style.  Instead, it gave me more conviction in the path I have chosen, which is to focus on dependable dividend payers that can weather market cycles and reward me with steady income.  It was a much-needed reinforcement that dividends, when paid responsibly, are not just passive income, they are an indicator of business resilience.  Here’s to growing with clarity, one dividend at a time.  Barista FIRE, here I come...!