The John Bogle Method for Building a Dividend Portfolio Under $10,000

"John Bogle, the legendary Vanguard Group founder and index fund pioneer, left an enduring legacy of knowledge and inspiration. He was wealthy, of course, but you can apply Bogle's dividend investment principles with $10,000 or less. Plenty of today's investors are enamored with high-yield stocks, but Bogle didn't over-focus on the biggest dividends. Instead, he adhered to sensible, basic principles that have stood the test of time. His fans, known as "Bogle-heads," come from a variety of backgrounds and have investment accounts of different sizes. Thankfully, Bogle left the world a dividend methodology - with action steps that practically anyone can use - to grow a small portfolio over the long term."

"As we alluded to earlier, bigger yields aren't always the best choice. Bogle warned, " Most investors should avoid reaching out on the risky limbs of higher-yielding junk bonds and high-dividend stocks." The imagery is stark and purposeful. We should put stocks with gigantic dividend yields in the same category as junk bonds; in other words, the tempting near-term payouts probably won't be worth the long-term loss of value."

"Rather than reach for the highest dividend yields you can find, consider focusing on earnings growth as it's a fundamental driver of wealth building. As Bogle put it, "Simply because of dividend yields and earnings growth, the fundamental value of stocks is highly likely to increase over time." Besides, it's entirely possible to find dividend-paying stocks representing businesses with earnings growth. Better yet, if you really want to uphold Bogle's spirit and values, stick to stocks representing all-around rock-solid companies. Just because your portfolio size isn't $50,000 or $100,000 doesn't mean you have to gamble with your capital. Bogle wouldn't want you to consume the tempting but risky "doughnuts" of the market; instead, he would have you favor the healthier "bagels""

A dividend investment approach emphasizes sustainable earnings growth over chasing the highest dividend yields. Investors should avoid risky high-yield securities that resemble junk bonds because tempting near-term payouts can produce long-term loss of value. Small portfolios can apply low-cost, disciplined methods and focus on dividend-paying companies that show earnings growth and solid fundamentals. Diversification and selection of rock-solid businesses reduce the need to gamble with capital. Action steps center on long-term value creation through earnings growth, sustainable payouts, and patience rather than reaching for outsized yields. Indexing and sensible principles enable modest capital to grow steadily over time.

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