Just 15 months ago, I did not know anything about DGI.
Of course I knew about stocks, but I thought the only way to make money on the market is to know which stocks will be at a higher price tomorrow than they are today. However, I did not find myself capable enough to find such stocks. As I have learned recently, this is not because I am stupid, but because nobody in the entire world knows.
Fortunately I came across DGI. This strategy enables you to make a profit without relying on rising stock prices, basically without doing anything. It opened my eyes and I really have to thank bloggers like Dividend Mantra, Captain Dividend, DivHut, DivGro and Roadmap to Retire, amongst many others for this insight!
Just knowing about the strategy was not enough reason for me to start the journey.
At the time I was very disappointed in all the major banks in The Netherlands. The average interest you would get at a standard savings account was 1.4% to 1.2%. With inflation taken into account, I was just losing money, instead of gaining some.
This was how it all started.
My primary goal was to beat the 1.25% interest rate I received in June 2014.
So, let's see what happened with the interest rate after June 2014.
|Interest rate of a standard internet savings account at the largest bank of The Netherlands.|
Ouch! Down 0.45% to 0.80% at this moment.
What would the bank have net me in interest?
In order to determine what the bank would have paid me in interest if I kept my money at the savings account, I calculated the balance of each month and added the according interest rate to it.
The bank would have paid me a total of €108.80 in interest over the past 14 months.
The power of DGI
Meanwhile I invested in 14 solid companies. From June 2014 to September 2015, they paid me a total of $484.04 in dividends. Unfortunately we have to deduct 15% because of tax, meaning a net total of $411.43 was received. This is the equivalent of €367.27.
Kaboom! The blue chip companies I invested in, paid me 3.38 times as much as the bank would have done. Amazing.. I would not have thought that this simple strategy could be this successful.
Keep at it and I'm sure you will beat your local bank as well!
Thanks for reading.