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Building a Dividend Growth Portfolio for Retirement

The ‘DGI For The DIY’ portfolio is a real-time, real-life, dividend growth portfolio that comprises a significant part of the retirement savings for this Do-It-Yourself investor.

This self-directed IRA originally began as an assortment of mutual funds offered by the full-service broker managing my company’s retirement plan. Then, in 2012, my company transitioned from a full-service broker to an online broker, providing me with the option to invest in individual stocks.

I took advantage of this opportunity, sold out of my mutual funds, and began investing exclusively in dividend growth stocks. I plan to build my passive income stream over time and eventually use it to fund a portion of my future retirement.

I began writing about this investment account after creating it in 2013, and have written regular updates about it on Seeking Alpha ever since.

Wandering Aimlessly In The Market

Unfortunately, when I first started investing in the stock market, I was investing without any guidance or direction. I fell victim to a problem that plagues many young investors: investing without a plan.

As Benjamin Franklin once said:

If you fail to plan, you are planning to fail!

When I started investing, I considered myself a “total return” investor, but in reality, I was more of a trader than an investor. I tended to buy positions in the hot names, fast growers, and high risers. The problem was that I usually purchased at the top of the hype cycle, only to see the tide turn and the bottom fall out.

Chinese stocks, nanotech stocks, TV manufacturers, and rare earth metal mining stocks — I pursued them all. This usually led to one of two outcomes: I would sell in frustration at a loss and then see the stock rise, or I would hold on to losing stocks for too long and lose valuable capital.

Keeping Things Simple – Avoid Speculation

The strong desire to find “home runs” rather than focusing on a proven track record and hitting “singles” and “doubles” led to a pretty low investing batting average and generally lousy returns.

I was buying risky stocks and also things I didn’t fully understand, like MLPs, commodity ETFs, foreign stocks, biotechs, and royalty trusts.

Needless to say, this approach wasn’t working very well for me. My investment returns badly lagged behind the market.

I see many young investors falling into similar traps in the years since. Marijuana stocks, “green” stocks, blockchain, crypto, meme stocks, EV stocks, NFTs, SPACs, etc.

The “stories” seem to be cycling faster than ever, and catching any of these waves at the wrong moment can quickly sour young investors on the joys of investing in the stock market.

A New Investing Approach

Fortunately, in January 2013, I found Seeking Alpha and began reading articles from the dividend investing strategy section of the site. I also read the corresponding reader’s comments sections that followed them. I found that many of the successful veteran investors were talking about long-term buy-and-hold investing, and more specifically, Dividend Growth Investing.

While reading the comments section of an article, I came across a recommendation for a book called “The Single Best Investment” by Lowell Miller. That book and the wisdom shared by some of the seasoned investors on Seeking Alpha likely saved me from myself when it came to investing. It gave me the guidance and framework for building a portfolio that would help me intelligently save for my retirement.

Over the course of the next two months, I methodically sold off the original collection of higher-risk stocks and mutual funds and built a portfolio of fifty-plus companies that I continue to write about to this day.

I began investing in the stock market in 2005, and it took me seven years of wandering aimlessly before I found out about DGI.  My goal with this site is to provide others looking for a place to start with information on how to be a successful do-it-yourself (DIY) investor and give them the courage to take control of their future retirements.

I’m hopeful that by sharing my story and providing a running commentary on the portfolio, I can help others who are in a similar situation.

Dividend Growth Portfolio Guidelines

The purpose of this portfolio is to fund a portion of my future retirement. Being in my mid-40s, I have another ~25 years to go until I reach that milestone.

This will be accomplished by managing the portfolio to produce a growing stream of income. I’ve established some simple guidelines that help me stay focused on reaching that goal:

  1. Buy companies that consistently show positive growth in earnings and are translating those earnings into increasing dividend payouts to shareholders.
  2. Focus on purchasing companies that are investment grade, with S&P credit ratings of BBB or higher.
  3. Maintain a diversified portfolio spread across multiple industries.
  4. Reinvest all dividends back into more shares of stock of companies that I own.
  5. Consider for sale any company that cuts or freezes its dividend.

Double-Digit Dividend Income Growth

As part of my planning process, I established a goal of 10% annual income growth for the portfolio. This income growth will come from organic dividend growth and dividend reinvestment, as cash contributions are no longer being made into this account.
 
Using $2,000 as a starting point, here is how 10% annual dividend growth will compound over the next twenty-five years. If I can meet that annual growth rate, the portfolio will produce $25k+ in passive dividend income in 2044, the year I’ll turn sixty-six years old.
 
DGI For The DIY – Annual Dividend Income

The far-right column shows the portfolio’s actual dividend income, documenting the progress over the past few years. So far, it’s ahead of pace, as the $3,989 of dividends in 2024 exceeded the goal of $3,897 by 2.4%.

If that 10%+ annual growth is maintained, I will collect over $2,000 per month in passive income at age 66.

This will be a nice supplement to other income sources (Social Security, military pension, IRA, ESOP) that my wife and I will have for retirement.

My Dividend Growth Portfolio

The portfolio has been a work in progress since its creation, but has evolved into a group of quality companies. The portfolio currently holds fifty-three companies, with nearly 90% of them currently showing gains on invested dollars:

My expected dividend income is now over $4,300, which means I’ve surpassed $350 in monthly income. This is more than what I used to contribute from my paycheck. It’s rewarding to see the progress and watch the income grow.

Portfolio value also continues to rise, hitting the six-figure mark during Q1 2021 and reaching nearly $166,000 as of the end of Q3 2025.

Dividend Growth Stock Watch List

As part of tracking my portfolio, I also maintain a watch list of stocks I own and others that I am considering for future purchases. The list is updated weekly, and I’ve been posting snapshots from this list on Facebook and Twitter for the past several months.

For the benefit of my followers, I’m also offering a download of the full spreadsheet to help with their research.

Here is the Dividend Stock Watch List in its entirety.

In return, I ask that you visit this page to view it and share it with others who might benefit from it. I hope others find it as useful as I do when looking for investment ideas.

Quarterly Portfolio Updates

As mentioned, I’ve been writing regular updates on this portfolio on Seeking Alpha since constructing it in early 2013. These updates show the changes made over time and chronicle my journey in learning about DGI.

Below are links to those updates showing the portfolio management. This includes buys/sells made during the quarter, announced dividend increases, and the progress made in income and capital appreciation.

This chronological history of my efforts provides a real-life look into the management of a dividend growth portfolio and my growth as an investor:

In addition to the quarterly recaps, I also publish updates highlighting the increasing dividend income the portfolio generates. For those blogs, please check out the portfolio update section of the site.

If my portfolio management style interests you and you would like more information about Dividend Growth Investing, please visit my DGI Resources section to find more places to learn about investing.