The Chowder Rule is nothing more than attempt to take away the focus on things you can't control (price changes) and invest with a mindset on something that is somewhat predictable (yield + yield growth).
If 30 years from now I want to be earnings $3000 per month in dividend income, I have $10,000 in current cash to invest and $500 per month to invest, I can input whatever dividend yield and growth needed to reach that level.
On the http://dripinvesting.org/Tools/Tools.asp, there is a link to "DCA Model Calculator C" that provides a spreadsheet to do this.
With a $10,000 investment and a 3.5% initial yield, growing share price and dividends at 6.5% annually (Chowder # = 3.5+6.5 = 10) you will have dividend income of $36,000 per year at the end of year 29.
I try to buy stocks with a Chowder Number of at least 12 to give myself a little bit more boost to my annual dividend increases. So far it has been working great in my portfolio. Using a 3% initial yield with 9% dividend/price growth I would have $45K in income at the end of 29 years.
If 30 years from now I want to be earnings $3000 per month in dividend income, I have $10,000 in current cash to invest and $500 per month to invest, I can input whatever dividend yield and growth needed to reach that level.
On the http://dripinvesting.org/Tools/Tools.asp, there is a link to "DCA Model Calculator C" that provides a spreadsheet to do this.
With a $10,000 investment and a 3.5% initial yield, growing share price and dividends at 6.5% annually (Chowder # = 3.5+6.5 = 10) you will have dividend income of $36,000 per year at the end of year 29.
I try to buy stocks with a Chowder Number of at least 12 to give myself a little bit more boost to my annual dividend increases. So far it has been working great in my portfolio. Using a 3% initial yield with 9% dividend/price growth I would have $45K in income at the end of 29 years.