Every investing article, podcast, and YouTube video will tell you the same thing about dividend investing: the yields are too low to matter. Why settle for 5% when you could swing for 50% on a growth stock?
I used to think this way too. Then I ran the numbers on what actually happens when you hold a quality dividend stock for 10 years or more. The result completely changed how I think about income investing. Because the yield you see on a stock screener today is not the yield long-term investors are earning.
The number on the screen is not your yield
Most people treat dividend yield like a fixed number. You look it up, it says 5%, and you move on thinking that is all you will ever get. Three percent of a $10,000 investment is $500 a year. Hardly enough to get excited about.
But yield is not fixed. It changes based on two variables: the dividend the company pays and the price you paid...