How to make the power of compounding work in dividend income investing
Identify a list of reliable dividend paying stocks. Know their economic moat, strength and weakness, their risks and their profit and cash flow sustainability and growth capability. From this list, evaluate which of them are beaten down or presents a good value proposition. Invest a comfortable amount of your “Investment Warchest” into them. Collect your dividends, capital returns and together with your additional savings set aside for investments, put it into an “Investment Warchest”. Periodically review Step 1 and 2 and invest your “Investment Warchest” or prune your existing holdings.