I was in a conversation recently with someone who mentioned that dividend income is rarely discussed
in retirement planning conversations. Why? He said, “…. because people think it’s boring.” That got me
thinking. If that’s true, I can see how dividend income doesn’t have the excitement of day trading, the
allure of the next big tech IPO, or the thrill of high-risk, high-reward investing. It’s not flashy, so many
assume it’s not that great.
But what if the very thing that makes dividend stocks "boring" is what makes them effective? And what
if this concept extends beyond investing—what if boredom itself has hidden benefits?

The Case for Childhood Boredom

Think back to when you were a child. Remember those long summer afternoons with “nothing to do”?
At the time, boredom seemed frustrating. But looking back, those moments often led to some of the
most creative, imaginative, and growth-filled experiences of childhood.

Science backs this up:

1. Creativity and Imagination:

The Child Mind Institute notes that boredom encourages children to
develop skills, creativity, and self-esteem. It pushes them to explore and invent rather than
passively consume entertainment.

2. Problem-Solving Skills:

Psychology Today highlights that boredom allows children to consolidate
past experiences and learn from their environment, fostering problem-solving abilities.

3. Emotional Regulation:

The Youth Connections Coalition points out that boredom helps children
develop coping mechanisms and emotional resilience, essential skills for adulthood.

Without constant stimulus, children are forced to find their own entertainment, which often leads to
growth, self-discovery, and even innovation. The results of boredom have a surprisingly great return.
The same principle applies to dividend investing.

The Case for "Boring" Investment Portfolios

In the investing world, the equivalent of a child’s boredom is a stable, dividend-paying portfolio. It’s not
the thrilling, high-stakes game of day trading or the excitement of chasing the latest market trend. But
history shows that “boring” investments can actually be some of the most effective when incorporated
into someone’s planning.

Dividends as a Key to Long-Term Wealth

1. Dividend Contribution to Total Returns:

Between 1930 and 2021, dividends contributed
approximately 40% of the S&P 500's total return, underscoring their significance in long-term
wealth accumulation. (Source: Hartford Funds)

2. Outperformance in Down Markets:

The S&P 500 Dividend Aristocrats, companies with a history
of increasing dividends, have historically outperformed the broader market during downturns.
In all six years when the S&P 500 was negative since 1989, these stocks outperformed the
broader index by an average of 13.28%. (Source: Morningstar)

3. Consistent, Reliable Income:

Unlike speculative stocks, dividends provide regular cash flow,
which can be reinvested or used for income in retirement.

Example of Long-Term Growth: If someone invested $10,000 in Procter & Gamble in January 1995, it
would have purchased 581.73 shares. If the dividends were reinvested, until today, the number of
shares owned would have grown to 1,207.96 shares, more than doubling. The current value of that
$10,000 investment would have grown to $206,257.14—a total return of 1,960.06% (10.77% avg annual
total return). How boring!! All you had to do was sit and watch the dividend income keep getting
reinvested over and over again. Like watching the ceiling fan spin round and round on a summer
afternoon when there was absolutely nothing else to do.

Why We Overlook Boring Investments

The financial media thrives on excitement. Headlines are dominated by stories about cryptocurrency, AI
stocks, and market bubbles. People want to hear about someone making a million dollars overnight, not

about slow, steady wealth-building strategies. But just like childhood boredom, the power of a "boring"
investment strategy is in its ability to provide long-term, sustainable benefits.

Embracing Boredom for a Better Future

As children, we didn’t realize that boredom was actually helping us grow. Similarly, many investors
overlook the long-term power of a "boring" portfolio because it doesn’t provide immediate excitement.
But the data is clear—steady, dividend-paying stocks have historically delivered strong, reliable returns,
making them, potentially, an essential component of any well-rounded retirement strategy.

So next time you hear someone dismiss dividends as "boring," remember: sometimes, boring is exactly
what we need to succeed.

Bibliography

1. Child Mind Institute. "The Benefits of Boredom." childmind.org
2. Psychology Today. "Are Bored Kids Happier?" psychologytoday.com
3. Youth Connections Coalition. "The Benefits and Dangers of Boredom."
youthconnectionscoalition.org
4. Hartford Funds. "The Power of Dividends." hartfordfunds.com
5. Morningstar. "There is Nothing Special About Dividends." morningstar.co.uk
6. Dividend Channel. "P&G 10K Investment Growth Calculator." dividendchannel.com