Increase Your Buying Power It has to do with my specific strategy for investing in the best dividend stocks. It's called the 10-11-12 System, and it is designed to achieve 11% yields and/or 12% average annual total returns within 10 years. The entire goal of the model portfolios in The Oxford Income Letter is to generate solid income today - and even more tomorrow. And typically, the stocks of companies that raise their dividends go higher and outperform the market. The secret sauce is dividend growth. The companies that I recommend in The Oxford Income Letter's portfolios have long histories of raising their dividends every year, usually by a meaningful amount, such as 10% or more. Think about what that does for an investor. If inflation rises 2.4% per year, what costs $1,000 today will cost $1,126 in five years and $1,268 in 10. If inflation returns to the historical average rate of 3.4% per year, $1,000 worth of goods will cost $1,182 in five years and $1,397 in 10. That means the 10% dividend raiser beats inflation. It actually increases your buying power - improving your quality of life or ability to save. An investor who receives $1,000 in dividends today and whose dividend payout increases 10% per year receives $1,464 in five years and $2,357 in 10. Verizon, as I once said on CNBC, is a great company - a leading telecommunications company with growing margins and earnings. But it doesn't have impressive dividend growth. It's paid a dividend every year since 1984 and raised it for 14 consecutive years. However, the growth rate of the dividend during the past five years was just 2.12%. That is not especially exciting. And importantly, it is not likely to help get income investors where they want to go. However, a stock that has a similar starting yield, but which also grows the dividend 10% per year, will yield 9.9% in 10 years. A $10,000 investment in even a 4% dividend grower will generate only $597 in income in 10 years, while the same investment in a stock with 10% dividend growth will spin off $990. That's a big difference. NextEra Energy Partners (NYSE: NEP) is a great example of the kind of dividend-growing stock I'm talking about. The company has raised its dividend an average of 16.5% per year over the past five years. And while its 3.2% yield today is less than Verizon's, if NextEra Energy Partners maintains a 16.5% dividend growth rate and Verizon keeps its 2.12% growth, NextEra Energy will pay a higher dividend yield based on today's prices in less than three years. So buy stocks like Verizon if you're most focused on short-term income. But if you're looking for a way to ensure your investments generate a significant amount of income in the future, be sure to stick with dividend growers that raise their dividends by meaningful amounts. Good investing, Marc P.S. My Oxford Income Letter readers just celebrated eight years of investment research that has led to gains as high as 586% (on our very first recommendation!). By exploring the Perfect Retirement Income Generator as a hobby, some of my readers have changed their entire outlook on their golden years... like firefighter Ethan K., who nearly tripled his money in 10 years. Click here to learn more about how this perfect pastime can help you claim up to five checks every single month. | 
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