Dividend Growth: Turbo-Charge Your Income by +448%

     I used to start my search for solid income opportunities by identifying companies with enormous dividend yields.  When I found a company that delivered a yield of 6%, 8% . . . even 10% or more, I felt like my work was done.

     Sure, I locked in a solid current income stream, but too many times, I was leaving money on the table -- a lot of money.

     It didn't take me long to learn is that not all current yields are created equal.  Some companies I invested in would continue to pay the same yield, year in and year out.  While other companies increased their dividend yield each year -- boosting my income and helping me to appreciate the importance of rising dividends.   

      And once I discovered the power of dividend growth, I never looked back.

      For example, let's look at a $10,000 investment in two different stocks; both paying a current yield of 8%.  In the first case, Company A continues to pay its 8% yield throughout the years. In the second case, Company B steadily grows its dividend yield by 10% each year.

     In ten years, Company B produces +59% more income -- all courtesy of its dividend growth.  In 20 years, Company B churns out an amazing +186% more in income.  And after 30 years, Company B will produces +448% more income than Company A.

      Turn $10,000 into $340,000 -- with Dividend Growth

     Current yields are always a great place to start looking for solid income opportunities.  But if you want to turbo-charge your income, keep searching until you find an investment that also delivers strong annual dividend growth year-in and year-out.  If my hypothetical example didn't convince you, maybe these real examples will.

     Altria (NYSE: MO), formerly named Philip Morris, had a dividend yield below 1% back in 1988 which might have escaped the notice of some income investors.  But while $10,000 invested in the S&P 500 in February 1988 grew into a substantial $83,925 by February 2008, that same $10,000 put into Philip Morris exploded into $347,715. You can attribute the bulk of that remarkable 34-fold gain to Philip Morris’ 20-year record of rising dividends.

     But that's just the start of the story.  Anyone who bought 200 shares back in February 1988 (then costing $17,350) would now be collecting $17,922 every year in dividends alone.  That's more than they invested to begin with!

     Do you think that 10% annual dividend growth is too much too ask? Over the last five years, BP Prudhoe Bay (NYSE: BPT) grew its dividend by an average of +37% a year.

     If you bought BPT in 2003, you already would have received +197% of your purchase price in income by the end of last year.  But it's even better than that - you also would have received another +417% in share price appreciation.

     A Great Time for Income Investing

     If you read the business headlines, you might not think it’s a great time for any kind of investing.  For the better part of a year, domestic investors have been singing the blues as they've watched the U.S. indices languish. The U.S. dollar is in a freefall, and the domestic economy appears to have stalled.  But these are exactly the conditions when it pays to be an income investor.

     For one thing, dividend-paying investments have clobbered the competition, in large part because they fare so much better during bear markets.  Over the vicious three years of 2000, 2001 and 2002, the stocks in the S&P 500 that paid dividends actually rose 10.4%, while the non-payers sank -33.19%.

     And these are just the averages.  There are plenty of 8%, 10% -- and even 12% yield opportunities overseas.  International companies know that paying a higher dividend yield is one sure way to attract the foreign investment they need to support their growing businesses.

     And international companies are growing.  Developed countries, like the U.S., are comparatively slow growers, even in the best of times.

     But you can see in the chart, there are many other countries around the world with growth rates many times that of the U.S.  Most of these countries are at far earlier stages on the economic development path and should continue to deliver much higher growth rates than the U.S. for years to come.  And the companies in those countries will grow their businesses -- and their dividend yields -- right along with their economies.

     Investors looking for that next turbo-charged income opportunity will find plenty of candidates overseas.  Your investments will have higher starting dividend yields -- and will have all the potential to grow even higher.  What more can an income investor ask for?

     With all these factors in mind, I launched my premium newsletter, High-Yield International, to highlight some of the best income producers in the world.

In recent issues I've featured an Australian fund with a current yield of 9.8%.  But it gets even better -- this fund has grown its dividend +15% annually over the last eight years.  I've also profiled a Brazilian utility with a current yield of nearly 7%.  And this is another great dividend grower -- boosting its yield over +20% a year since it began trading in the U.S. markets.

     If you'd like to learn the names of these companies -- plus receive a steady stream of foreign stocks, funds and other investing ideas with abnormally high dividend yields each and every month -- then I'd like to extend you a personal invitation to try my premium international investing newsletter
. . . High-Yield International.  Visit this link to learn more.

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