Seed Money for Your Dividend Farm

An early post on Dividend Farmer discussed the need for seed money to plant if you were going to eventually grow dividends.  Many investors think the toughest part of investing is finding the right ground in which to invest.  I’ve spent considerable time talking about investing philosophy, stock selection here and here, and the power of dividends compounded over time here and here.

Seed Money

I’ve not covered what may be the toughest hurdle for investors to clear in starting their dividend farm; acquiring the necessary seed money.  Earlier this month Lending Tree posted total U.S. credit card interest payments had hit $113 billion with an average rate of 16.86%.  The average balance for consumers holding credit cards was $6,348.

If you’re making mortgage, auto, and student loan payments plus payments on the average credit card debt, it can be challenging to generate seed money.  But not impossible.  This is where the Time and Patience needed for successfully farming dividends begins forming.

There are a variety of strategies to help your money building effort, but it’s hard to go wrong with simple: spend less than you make.  Five one-syllable words.  Easy to read or say.  Challenging to practice consistently.  Start here anyway.

Some folks begin small by dropping all their change into a bucket or giving up one double mocha macchiato a week to generate savings.  Others go bigger by deleting the family’s cable TV package with premium channels or ditching the twice weekly dining out in favor of cooking at home.  Still others go all-in by downsizing the 4,500 square foot house and foregoing the leased Jag in favor of a used Hyundai. 

There isn’t a universally correct answer but there is an answer right for you.  Do what you can, where you are, with what you have.  Start.  Be persistent.  The first step may be the hardest but you won’t reach your destination if you don’t get on the road.  Biblically speaking, hardship builds persistence; persistence, character; and character, hope.  Hope for a better financial future for you, your family, and those you chose to help.  Start today and tour future self will thank you for it.

The thoughts and opinions expressed here are those of the author, who is not a financial professional.  Opinions expressed here should not be considered investment advice.  They are presented for discussion and entertainment purposes only.  For specific investment advice or assistance, please contact a registered investment advisor, licensed broker, or other financial professional.