HOT TIP FOR YOUNG INVESTORS... DITCH THE DIVIDENDS!

Why Dividends Might Be Holding You Back From Real Wealth

Picture this: You’re sipping your favorite iced latte, scrolling through your phone, and feeling pretty good about your finances. You’ve been hearing all about investing (good for you!), and somewhere along the way, you stumbled upon dividends. Free money just for holding stocks? Yes, please!

But hold on a sec - what if I told you that focusing on dividends too early might actually be slowing down your wealth-building journey? Yep, it’s true. If you’re still in the early stages of investing, you might want to rethink that strategy.

The Truth About Dividends (And Why They Sound Better Than They Are)

Dividends are payments that companies make to shareholders - kind of like a little thank-you gift for owning their stock. Companies like Lululemon and Sephora do this regularly, and for investors who are already sitting on big portfolios, it’s a great way to bring in extra income.

But here’s the thing: When a company pays out dividends, it’s basically saying, “Hey, we’ve made enough money and don’t really have big plans to grow anymore.” That’s why established, slow-and-steady businesses tend to offer dividends, while companies with serious growth potential (think Glossier or Peloton in their early days) reinvest every penny into expansion instead of handing out small payouts.

Growth Stocks vs. Dividend Stocks: Which One Builds More Wealth?

Let’s break it down:

• Dividend stocks are usually big, established companies. They’re reliable, but their stock prices don’t skyrocket because they’re not reinvesting as aggressively.

• Growth stocks pour every bit of profit back into the business to fuel expansion. They might not pay dividends, but they have the potential to multiply in value over time.

If your goal is to build serious wealth, you want to be in the second category. Investing in growth stocks means your money works harder for you, increasing in value rather than trickling back to you in tiny quarterly payouts.

The Magic of Compound Growth (aka, Your Best Financial Friend)

One of the biggest financial advantages you have right now is time. When you invest in growth-focused stocks, you’re letting your money compound - meaning every bit of growth builds on top of previous growth. Over years (or decades), this can lead to some seriously impressive numbers.

Sure, growth stocks can be a little more unpredictable. You’ll see your portfolio go up and down, but that’s totally normal. And if you have the patience to ride out the bumps, history shows that growth investing tends to outperform dividend investing in the long run.

When Do Dividends Make Sense?

Now, don’t get me wrong - dividends do have their moment. Once you’ve built up your investments and you’re more focused on maintaining wealth than aggressively growing it, dividend stocks can provide a great stream of passive income. Think of them like a financial safety net for later in life.

But if you’re still in your wealth-building phase? Your focus should be on maximizing growth, not collecting small payouts that won’t move the needle much.

Let’s Grow That Portfolio!

If you’re serious about taking your investments to the next level, you need a strategy that actually works for you. That’s why we created The Investing Club - a community of ambitious women who are ready to build wealth on their own terms.

Join us today for expert insights, real talk about investing, and a network of supportive, like-minded investors. Your future self will thank you!

Bottom line? Skip the dividends (for now) and focus on the kind of investing that builds real, lasting wealth. You’ve got this!