Marc Lichtenfeld is the author of Get Rich with Dividends, a title recently listed as the #3 best dividend investing book of all time here on Financial Expert.
Following the announcement of this new position for the book, I reached out to Marc through social media and secured this brief written interview which I’m delighted to be able to share with you below.
Beyond his books, Marc is Chief Income Strategist for The Oxford Club, a research company that has produced financial letters to private investors for over 30 years. He’s also the brains behind the free finance website www.wealthyretirement.com
If you want to learn more about Marc, you can follow him on Twitter where his twitter handle is @stocksnboxing. Alternatively, feel free to leave a comment below to start a discussion.
Marc Lichtenfeld books fall into the following genres:
- Personal finance books
Interview with Marc Lichtenfeld
Please could you tell us a little about your professional background and why you felt inspired to write the book?
I started my career as an assistant on a trading desk, eventually becoming a trader. Later, I became a sell side analyst and have now been with the Oxford Club for almost 14 years.
I wrote the book because I saw too many people who wanted to improve their finances but weren’t sure how to do it or were operating with misinformation. Nearly everyone has had financial stress in their lives. Financial stress can cause marriages to break up and people to make bad decisions that can significantly affect their future. My hope was that Get Rich with Dividends would help alleviate that stress, not only because it would help people achieve their financial goals but because they would know they were on a plan that has worked over decades and will work for them as well.
This title is a guide suitable for beginners. What drove you to write such a comprehensive guide compared to a more specialist title?
I wanted to put a book in people’s hands that would give them the information and step by step instructions that they needed to put themselves on a successful plan. I know that there are so many smart people out there who have no idea how to invest for their future or how to simply generate the income they need today.
These vital concepts are not taught in schools or universities, yet it’s one of the most important lessons a person can learn before they go out into the world and make a life for themselves.
Financial literacy and the lack thereof is a huge problem all over the world. I hope that Get Rich with Dividends helps to alleviate that issue for many people.
In the course of researching and writing your book – did you come across anything that surprised you?
There were two things. First, how insanely large the numbers get the longer you can continue to invest. Compounding is an amazing thing. And when you create a spreadsheet like I did to see how the dollar figures change year after year, it was astonishing.
For example, if you invest $10,000 in a portfolio that yields 4%, with 8% annual dividend growth, with the historical average stock market appreciation and reinvest the dividends, after 10 years you’ll have more than $31,000. But 10 years after that you’ll have nearly $99,000. Keep doing it for another decade you’re sitting on $314,000. And if you’re fortunate to have 40 years to let the money grow, your one-time $10,000 investment is now worth more than $1 million.
The other thing that I learned is that CEOs, particularly those of large cap companies, historically buy back shares at the absolute worst time. Never when their stock craters, usually when their stock is at all time highs and lofty valuations.
I always knew that I preferred dividends over a stock buyback because I believe that if the company has excess cash, shareholders should decide for themselves whether the stock is still a good value. If it is, they’ll reinvest their dividends. If not, they won’t. But excess cash should belong to shareholders, not to management that may be incentivized to lower the share count in order to artificially boost earnings per share.
For budding financial writers, what is the one piece of advice would you give to those writing to educate beginners about investing?
Have some fun with it. Make it approachable. Many people are scared of financial topics and it can often be dry. There’s nothing wrong with injecting humor and personality into it. You could have the greatest investing strategy in the world, but if no one gets past the first few pages, it won’t do them much good.
And finally, I like to ask all authors; when saving and investing your own money, what is your preferred investing style?
The exact strategy I wrote about in the book. Investing in dividend growth stocks for the long term. I was fortunate to get a lesson in the power of compounding when I was 22 years old and started investing then. It is incredible what a difference starting then has made. Time is one of, if not the, most important factors in investing success. Even if you’re older, starting now and letting your investments compound for as long as you possibly can will make a tremendous difference.