The rising dividend every year will help off-set risk of inflation. This will be especially helpful when you retire and start having dividends sent home, rather than having dividends rolled over into more shares.

During retirement years, when dividend is being sent home to help ends-meet, price of stock doesn’t matter. Your income increases every year anyway, because every company owned has a program of raising their dividend every year.

After retirement, if your account is worth $250,000 one year and due to a severe drop in stock market, net value of your securities drops to $200,000, net worth of securities at $200,000 would still generate a higher cash dividend income. The net worth of your holdings means little, if income produced from your holdings is increasing every year, no matter what net worth.

That is partial reasoning behind investing in only those companies that raise their dividend every year. The other reasonis to eliminate risk in investing in stock market. A company that has been raising their dividend every year MUST be doing something right or money wouldn’t be there to pay their shareholders ever-increasing cash dividends.

The lower stock price goes, after your initial investment, higher dividend yield of stock. This is extremely powerful and beneficial for you when you are still having dividends reinvested. Reinvesting those dividends at a lower stock price accelerates your cash dividend income.

And if you are in retirement and no longer investing in stock, lower stock price does not affect your dividend income at all. The cash dividend income will still increase every year due to company’s program of raising their dividend every year.

As time goes on using this type of investment plan/approach you will discover that by reinvesting those ever-increasing cash dividends, coupled with stock appreciation is a very powerful wealth creating formula!

For more excerpts from book ‘The Stockopoly Plan’ visit: http://www.thestockopolyplan.com