Welcome to the Dividend Talk podcast, episode number 13, where we dive into the significance of savings rates for dividend growth investors. In this episode, co-hosts Engineer My Freedom and European DGI share their insights and personal experiences regarding savings rates and their impact on achieving financial independence.
The Hosts’ Weekly Update
As the episode begins, the hosts catch up on their busy weeks, noting the transition from summer to autumn. They express excitement for the upcoming weekend and discuss the recent return of football, which has been a highlight in the news. Additionally, they touch on Apple’s recent controversies regarding its app store policies and the implications for competition in the tech industry.
Current Events and Their Impact on Investing
The conversation shifts to significant news in the healthcare sector, particularly regarding AstraZeneca’s vaccine trials. The hosts discuss the implications of adverse events in vaccine trials and the importance of thorough testing before widespread distribution. They emphasize the need for caution and the potential for volatility in the healthcare sector as vaccine developments unfold.
Why Savings Rates Matter
The Role of Savings Rates in Financial Independence
The main topic of the episode revolves around the importance of savings rates for dividend growth investors. The hosts explain that a higher savings rate allows investors to allocate more funds towards investments, which can significantly shorten the time required to achieve financial independence.
For instance, if an investor can save 50% of their income, they can invest that amount, potentially covering their expenses through dividends in about 15 years. Conversely, a lower savings rate can extend this timeline considerably. The hosts emphasize the power of compounding and the necessity of discipline in maintaining a high savings rate.
Personal Savings Strategies
Both hosts share their personal approaches to savings. Engineer My Freedom mentions maintaining a savings rate of around 45-50%, achieved by living frugally and prioritizing investments. He discusses the importance of paying himself first by directing a significant portion of his salary into investment accounts.
European DGI shares his experience of living below his means and the importance of having a supportive partner in managing finances. He highlights that while he and his wife have different spending habits, they work together to maintain a healthy savings rate.
Advice for New Investors
The hosts offer valuable advice for new investors entering the dividend growth investing space. They stress the importance of enjoying life while also saving for the future. Living below one’s means and focusing on increasing income can be more beneficial than strictly cutting expenses. They encourage new investors to take calculated risks and to prioritize experiences over excessive frugality.
Listener Questions
The episode concludes with a segment addressing listener questions, covering topics such as stock valuation, investment strategies, and the potential of specific companies like Walgreens and Novo Nordisk. The hosts provide thoughtful insights and encourage listeners to consider their investment goals and strategies.
Support Us
There are a couple of ways that you can support me if you like my content
Free Ways to Support Us
- Follow us on social media. Twitter or DividendTalk (@dividendtalkpodcast) • Instagram photos and videos
- Listen to our Podcast Dividend Talk | Podcast on Spotify
- Follow my Buddy Home European Dividend Growth Investor – European Dividend Growth Investor (europeandgi.com)
- Subscribe to my YouTube channel, Dividend Talk, on YouTube.
Affiliate links: I use these services. If you plan to use these anyway, it won’t cost you any more, but I may receive a commission.
- Seeking Alpha – I use seeking alpha quite a bit. They have a free version, but I will get a commission if you sign up for the premium version. ( I use the premium version)
- Buy me a coffee – if you don’t want to use any of the above services, you can always buy me a coffee.
- Buy a bracelet from my niece – BraceletsByLucyIE – Etsy Ireland. I am trying to teach my niece what they won’t teach her at school. 15% of all profits are mine, but I donate this to charity as my main goal is to teach Lucy about business
Disclaimer
Dividend Talk is not a licensed or registered investment adviser or broker/dealer. We are not providing you with individual investment advice on this site. Please consult with a licensed investment professional before you invest your money. This site is for entertainment, informational, and educational use only.
Any opinion expressed on the site here and elsewhere on the internet is not a form of investment advice provided to you. We use information, data, and sources in the articles we believe to be correct at the time of writing them, but there is no guarantee of their accuracy, completeness, timeliness, or correctness. We are not liable for any losses suffered by any party because of information published on this site. Past performance is not a guarantee of future performance. By reading this site or subscribing to it, you agree that you are solely responsible for making investment decisions with your funds.
