A few days I wrote a post about Derek Foster who retired at the age of 34. His books contain decent information, especially for Canadians.
The main principle he teaches is to buy shares or unit trusts that pay good dividends / distributions. Then hold, use the Dividend Re-Investment Plan (DRIP) and keep adding shares. In the books he clearly states that a person should buy and hold indefinitely.
Using regular dividend payments to become financially independent
Of course the markets in the last few months have been somewhat different from normal. As I read 2 of Derek’s books, written in 2007 & 2008, I could not help but wonder how this strategy would work in the current financial crisis. The idea of living of dividends is good, but what happens when so many of the companies you are relying on for income slash their dividends by 75% or simply stoppaying them altogether?
Well it seems that Mr. Foster has shown what needs to be done. It transpires that he liquidated his assets in February 2009.
Click the link to read the Globe & Mail interview with Derek Foster in March 2009.
To view / purchase Derek’s books, visit his website www.stopworking.ca
