The Dividend Growth Investment Strategy: How to Keep Your Retirement Income Doubling Every Five Years (Hardcover)

~ Klugman Roxann (Author)
Key Phrases: stock market roller coaster, annuity owner, plan owner, The Dividend Growth Investment Strategy, Value Line, Wall Street Journal (more...)

Editorial Reviews

Product Description

In 1944 Anne Scheiber, a lifelong federal employee whose income never surpassed $3,150 a year--yes, the figure is correct!--invested $5,000 in blue-chip stocks. When she died in 1995 her stocks were worth $22 million--that figure is also correct!--and she was receiving an annual income of over $1 million in dividends from them. The Dividend Growth Investment Strategy tells how she did it and how others can invest long-term in stock for retirement income.

Over half of all Americans have money in the stock market, most of it in mutual funds. But most mutual funds underperform the stock market, and they are taxed. The taxes and fees destroy compounding of investments and diminish the retirement nest egg. Anne Scheiber's method, the Dividend Growth Investment Strategy (DGIS), beats the mutual fund in returns fivefold after thirty years, though both approaches achieve 14 percent annual growth.

This book examines and compares the various investment strategies of stocks, bonds, and mutual funds and shows in hard figures why DGIS is the better investment strategy. The DGIS maximizes growth of the nest egg while producing income that doubles every five years. It also minimizes anxiety over market downturns and inflation because investors can ride the market "roller coaster" by keeping their capital growing, while riding the stock market "escalator" through dividend growth returns, all the while avoiding taxes on their dividends.

To help the investor choose stocks, company fundamentals are discussed along with suggestions on how to research them and what materials to use. --This text refers to an out of print or unavailable edition of this title.

About the Author

RoxAnn Klugman, a tax-law attorney and retirement and estate planner, teaches seminars in the Dividend Growth Investment Strategy. She lives in Edina, Minnesota. --This text refers to an out of print or unavailable edition of this title.

Product Details

• Hardcover: 290 pages
• Publisher: Citadel; First Edition; First Printing edition (January 1, 2001)
• Language: English
• ISBN-10: 0806521821
• ISBN-13: 978-0806521824
• Product Dimensions: 9.1 x 5.7 x 1.2 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (7 customer reviews)
• Amazon.com Sales Rank: #576,605 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

40 of 43 people found the following review helpful:

5.0 out of 5 stars Insightful and thought provoking, April 23, 2004

By	Daniel Ginensky (Bet Shemesh Israel) - See all my reviews (REAL NAME)

I've been investing in stocks and reading investment books for 5 years. Ms. Klugman's book is definately one of the best I've read.

She makes a very cogent arguement for this style of investing, which in a nutshell is:

1. Dividend growth shields investors from emotional turmoil of having your investments sink in value, since these stocks tend to stand up well and also because of the dividend income stream. This is very important if you have a low threshold for financial panic.
2. Dividend growth provides relatively small income streams at first, presumably when you don't need income (and when your taxes are highest), but it grows so that at retirement you will have a large annual income.
3. Dividend growth strategy should have much higher returns than bonds, since your dividend income will grow, while bonds pay static returns.
4. If you hold stocks in an IRA and just live off the dividends and pass the stocks to your heirs, it is a perfect tax shelter for transfering huge amounts of wealth, since all the capital gains on the stocks are not taxable when the stocks are inherited.

Ms. Klugman does mention in passing that Dividend Growth is not necessarily the highest return strategy, and probably will not even keep pace with an index fund. However, Ms. Klugman makes a very compelling case for this style of investing. In addition, her observations about the Wall Street in general are insightful and make good reading.

I have read over 20 books on investing. This is the among the few that I am still mulling it over 2 weeks after I finished reading it.

72 of 82 people found the following review helpful:

2.0 out of 5 stars USEFUL, BUT......, July 28, 2003

By	G. D. Geiss (Harrisburg, Pa. USA) - See all my reviews (REAL NAME)

It is not my purpose to pan this book. The 5 star rating system is sometimes less flexible than one would like. Ms. Klugman actually has a good point to make. Dividends are very useful in any investment strategy that has twenty or thirty years to run. In fact I would go so far as to argue that as a shareholder, a dividend is your absolute right. You own that company, or part of it. Without your capital, the company would not likely be in business and, when it makes a profit, you the owners, should share that success without having to sell your shares to realize it! Ms. Klugman, however, seems sometimes less than fair and careful when arguing against views she does not share.

For intance, she seems to suggest that if you own bonds, you are a faint hearted chump. She utterly fails to accord to bonds the same compounding effect she claims for dividends. Nonsense. Anything that returns a gain that's reinvested compounds. Let me attempt a quick (and mathematically dirty) example to show the approximate effect of bonds, in this case a bond fund. Say three years ago you had $100,000.00. Say you put it all into S&P 500 quality stocks with no dividends. At the end of 2002, you'd have had about $69,880. If you include a 2.5% dividend yield each year you'd have about $76,568. If, however, you'd put $80,000 into the dividend S&P 500 stocks and $20,000 into Vanguard's Long Term Corporate Bond fund, after paying it's .31% annual cost you'd have a total (between stocks and the bond fund)of about $90,258, a full 20.4% better than 100% stocks without dividends and 13.7% better than the dividend stocks. If you were looking at retirement inside of 10 years, that bond cushion would have made a big difference to you.

I know this is long, sorry. But one more point. Dividends are not guaranteed to rise. Even in a strong dividend culture like Heinz, a company Ms. Klugman cites favorably, this is demonstrably true. From a 3 for 2 stock split in '95, Heinz quarterly dividends climbed steadily from $.26/share to $.43 in 3/02. Then they were lowered to $.41, climbed again to $.44 in December '02 and were slashed (no stock split this time) to $.27/share in 3/03.

Still, dividends are MUY BUENO! If you own stock in a company not paying them, ask them and yourself why. If Ms. Klugman's book motivates you to look into this dividend thing, there's a web site (and newsletter) that you may find very interesting. ... This is put out by Ms. Geraldine Weiss (and her merry men) and will give you some insight into valuing companies by the relative dividend yield of their stock (a concept also practiced by Ms. Nancy Tengler and her associates). Ms. Klugman has the right idea here: take control of your own future. As such this is a useful book, but... there is no one surefire way. It's about dicipline , diversification, and allocation of assets (all of which I say better than I do). Good luck to you all, and remember, neither governments nor corporate managements know how to use your money better than you do.

13 of 14 people found the following review helpful:

4.0 out of 5 stars A Good Strategy for Investing, April 16, 2005

By	T. Hooper "thdizzy" (Osaka, Japan) - See all my reviews (TOP 1000 REVIEWER)    (REAL NAME)

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This book introduces an excellent idea for investment. Basically, you should look for well-established companies with a good track record of dividend increases, invest, and wait 30 years. If you have less than 25 years until retirement, this stategy might not work so well for you because the real wealth development tends to kick in at around the 25 year mark and shoots up from there. If you have less time than that, then you'll only see a modest return on your investments.

The author provides her pick of top performers historically. Of course this doesn't mean that these will continue to perform in the future. The only weak point of this book is that it is based on data from the tech bubble era of the late ninties. If you plan on taking the authors recommendations, be sure to do your homework and check up on the companies to see how they have weathered the years since the burst of the tech bubble. I would say about 75 percent of the recommendations are still good, while a few such as AIG may not be so smart right now. Just be sure to do your homework. It might be time for the author to give us an updated version of this book.