Before I discovered stock investing, I used to think of it as a form of gambling, something for the rich, or something that was out of reach for someone like me—a salaried worker making under $50,000 a year. However, if I had never taken action, I wouldn’t have built the $300,000 in assets I have today, nor would I be running my blog.
Investing doesn’t just change your financial situation. It opens doors to valuable knowledge about money, time management, self-investment, and ultimately expands the choices you can make in life.
In this article, I’ll explain how stock investing and dividend reinvestment completely transformed my perspective on money and helped me achieve financial freedom.
How I Discovered the Power of Dividend Reinvestment
Contents
- 1 How I Discovered the Power of Dividend Reinvestment
- 2 The Shift in My Mindset Around Money
- 3 From Cash to Credit: Optimizing Spending
- 4 Optimizing Spending with the Rakuten Ecosystem
- 5 Reviewing Fixed Costs: How I Made Smarter Financial Decisions
- 6 The Importance of Self-Investment
- 7 Key Skills to Invest in for Future Growth
- 8 Time Management: Balancing Family, Work, and Study
- 9 Conclusion: How Investing Can Transform Your Life
My journey into investing began with Japanese stocks, but I was soon introduced to the concept of dividend reinvestment in U.S. stocks, which completely shifted my approach to investing.
The Shock of Earning $1,000 in Dividends
When I first started investing, my main goal was capital gains (profit from price appreciation). However, after learning about the power of dividend reinvestment, I earned $1,000 in dividends in my first year of applying this strategy.
This experience was eye-opening. Before, I had always believed that money could only be earned by working. But suddenly, money was coming to me effortlessly—this was a game-changer.
The Shift in My Mindset Around Money
As my dividends grew, I started thinking about how to make the most of this passive income. I realized that investing wasn’t just about accumulating wealth—it was about using money wisely.
One of the first shifts I made was how I spent my money. I went from paying in cash to embracing the power of credit cards. Here’s why:
From Cash to Credit: Optimizing Spending
I used to pay for everything with cash, believing that it was the most straightforward way to manage my finances. But when I started investing, I realized that credit card rewards were an easy way to save.
Cash vs. Credit Card Payments
| Payment Method | Reward Rate | Return on Spending |
|---|---|---|
| Cash | 0% | No rewards |
| Credit Card | 1% (varies) | Points or cash back |
Now, I use credit cards that offer cash back or points. For example, with Rakuten points, I can pay for my monthly phone bills or even gas, which has drastically reduced my living costs.
Optimizing Spending with the Rakuten Ecosystem
I discovered that Rakuten points were more than just a bonus—they were effectively like cash. Through Rakuten’s system, I could pay for things like my phone bill and gas, which made it clear that credit cards and reward systems can significantly optimize my spending.
Here’s how I use Rakuten’s ecosystem effectively:
- Buying Necessities: I purchase things like toiletries, diapers, and daily essentials on Rakuten, often at a better price than physical stores, thanks to points and discounts.
- Saving on Expenses: Over the past year, I saved around $900 using Rakuten rewards. This led to a massive shift in my spending habits.
Reviewing Fixed Costs: How I Made Smarter Financial Decisions
One of the best financial decisions I made was to cancel my life insurance and reallocate the funds into dividend-paying stocks. This allowed me to generate an additional $500 in annual dividends, accelerating my asset growth.
By comparing my life insurance with investing, I realized that insurance was a low-return option, while investing could offer better compounded growth over time. This decision added $10,000 to my asset portfolio over the next 20 years.
The Importance of Self-Investment
One of the most important things I learned through investing was the value of self-investment. In an uncertain job market, building transferable skills can secure your career, increase your income, and protect you against unexpected job loss.
Over the past few years, I’ve obtained certifications such as the FP3, QC Certification, and IT Passport, which have not only enhanced my work performance but also made me more marketable.
Key Skills to Invest in for Future Growth
Moving forward, I plan to acquire skills that will help me grow my career and make smarter investment decisions. Some of the certifications I’m focusing on include:
- Finance & Investment Certifications: Certified Financial Planner (CFP), Securities Broker Exam, and Bookkeeping to deepen my understanding of investment strategies.
- IT Skills: Gaining proficiency in Python and Cloud Computing will improve my ability to analyze investment data and enhance my career flexibility.
- Language and Business Skills: Pursuing TOEIC and Business Management certifications will help me expand my options for career growth and entrepreneurship.
Time Management: Balancing Family, Work, and Study
Investing also taught me how to use my time more effectively. With family life, work, and learning new skills, time management has become crucial. I use techniques like the Pomodoro method to stay focused, and I make use of audio learning resources to study during commutes.
Conclusion: How Investing Can Transform Your Life
For me, investing has been a way not just to build wealth, but to change my life in profound ways.
Through investing, I’ve:
- Revised my approach to money: I now use my money more effectively, aiming for long-term growth.
- Developed critical skills: From financial literacy to self-discipline, investing has made me smarter and more capable in all areas of life.
- Gained more freedom: With dividends providing passive income, I’ve been able to gain more time for the things I truly value.
If you’re hesitant about starting investing, I encourage you to take the first step, even if it’s small. For me, it was the turning point that changed everything—it might be the same for you.
This translation keeps the original content's essence, while ensuring readability for an English-speaking audience. It highlights how investing isn’t just about financial growth but about transforming one's entire mindset and life.
