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The Dividend Growth Investment Strategy: How to Keep Your Retirement Income Doubling Every Five Years

November 18, 2008

The Dividend Growth Investment Strategy: How to Keep Your Retirement Income Doubling Every Five Years In 1944 Anne Scheiber, a lifelong federal employee whose income never surpassed $3,150 a year–yes, the figure is correct!–invested $5,000 in blue-chip stocks. When she died in 1995 her stocks were worth $22 million–that figure is also correct!–and she was receiving an annual income of over $1 million in dividends from them. The Dividend Growth Investment Strategy tells how she did it and how others can invest long-term in stock for retirement income.

Over half of all Americans have money in the stock market, most of it in mutual funds. But most mutual funds underperform the stock market, and they are taxed. The taxes and fees destroy compounding of investments and diminish the retirement nest egg. Anne Scheiber’s method, the Dividend Growth Investment Strategy (DGIS), beats the mutual fund in returns fivefold after thirty years, though both approaches achieve 14 percent annual growth.

This book examines and compares the various investment strategies of stocks, bonds, and mutual funds and shows in hard figures why DGIS is the better investment strategy. The DGIS maximizes growth of the nest egg while producing income that doubles every five years. It also minimizes anxiety over market downturns and inflation because investors can ride the market “roller coaster” by keeping their capital growing, while riding the stock market “escalator” through dividend growth returns, all the while avoiding taxes on their dividends.

To help the investor choose stocks, company fundamentals are discussed along with suggestions on how to research them and what materials to use.
Customer Review: Unfortunately, very disappointing
I’d been looking forward to reading this book for some time based on reading a few of the reviews that had been circulating on ‘The Dividend Growth Investment Strategy’ by Roxann Klugman. But after reading it I was very disappointed for a couple of reasons in particular.

i) The book effectively finishes 122pages in (of a 290 page book) when you come across the Appendices.

Nothing new or revolutionary is introduced in this book and there’s quite a few quotes used to support her point of view from investment leaders such as Warren Buffett. Which is fine if you’re got something to add or a particular point of view, but this book is a little ‘me too’. Much of the content has already been covered (in a more comprehensive fashion) in other ‘value investing’ titles. That’s not to say the premise of dividend growth investing is invalid (it’s not) – but you’re likely to finish with more questions than you started with.

ii) The first 122 pages really felt like an introduction – but there’s not much depth to the book.

In all fairness, the book is written well in a down to Earth fashion; problem is, is that there’s just no depth to the content and when you get to the appendices you feel ripped-off because all the momentum Roxann Klugman builds in earlier chapters ends abruptly. Leaving you with 100+ pages of outdated data on a few selected companies.

There’s not really anyone I would recommend this book to. If you’re a beginning investor then there are better books available that are more comprehensive and you’ll find yourself keeping as a reference. If you’ve been investing for a while, then this book is really too shallow to be of any real use, and not the sort of thing you would keep as reference.

If you’re still really keen on this book, then I suggest you look for it second hand or borrow it from a library.
Customer Review: A simple but powerful strategy
I bought this book and ‘Beating the S&P with Dividends’ that cover the same topic. Rozann’s presentation was much better in laying out the strategy and the concepts behind the strategy. The only drawback with the book is that the data on stocks listed in the book are a little dated. However, the strategy is the most important part of the book. You can always find up-to-date stock/company information on the Internet. It is a good fast read and I have applied the strategy to my IRA stock holdings.

The ‘Beating the S&P with Dividends’ has more up-to-date company information and various stock lists with different focuses. I used the information for both books to make changes to my stock holdings.

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