Two Ways to Double Your Income

1960 - 2017:

• U.S. Wage Growth: 6.26% p.a.
• S&P500 Dividend Growth: 5.97% p.a.
• U.S. Inflation Rate: 4.05%

We don't normally look at dividend growth, focusing on yield instead, which for the last 20 years has fluctuated between 1%-3%. This gives the illusion that dividends are constant - stagnant even. But market value of shares have increased over the long term, which means dividend values have followed.

Between 1960 and 2017 nominal dividend income from your S&P500-tracking portfolio would double every 12 years, assuming you didn't panic-sell in 1987, 2000, or 2008.



Your nominal wages would on average, double faster in the same period, but not by much: 11.5 years. Naturally, being above average (like everyone else) you would climb the wage ladder much faster. However, an illness, a layoff, a late start, or a misstep will wreck your … average.

Furthermore, if you'd started your career in 1960, you would probably (fortunately or unfortunately) be considered too old for employment in 2017. Whereas the dividends would keep coming as long as the S&P500 had constituents.

This is not meant to be investment advice. (And past performance is no indicator of future returns, rah rah.) Rather, it is intended to give some solace to unemployed investors (like me) who fear the rents we live off will not let us keep up with our salaried peers.